2019 Asia Special Issue Urban Land

SOUTH KOREA

CHINA

THAILAND

HERITAGE AT INTERCONTINENTAL DEALING WITH JEONJU SHANGHAI BANGKOK’S HANOK VILLAGE WONDERLAND HOTEL CLIMATE CHALLENGE C1-11+spine_Asia19.indd 1

INTERVIEW

CHAIRMAN NICHOLAS BROOKE 5/9/19 2:16 PM

Shanghai’s Latest Work of Art

For more information visit: onemuseumplace.cn Joshua Lindberg +86-21-6077-5151

C1-11+spine_Asia19.indd 2

5/9/19 2:16 PM

C1-11+spine_Asia19.indd 1

5/9/19 2:16 PM

C1-11+spine_Asia19.indd 2

5/10/19 12:35 PM

16_Who

T:8.875” S:8.625”

ROCK SOLID INNOVATION. ®

PGIM Real Estate’s track record of innovation in real estate investment is more than 49 years in the making.

From the first U.S. open-end commingled real estate fund and European high-yield real estate debt fund to a 24-year legacy managing Asia Pacific value-add strategies, we seek to uncover new opportunities to deliver attractive risk-adjusted returns for our investors.

$168.4 BILLION REAL ESTATE EQUITY AND DEBT AUM/AUA 2 $30 BILLION+ IN 2018 GLOBAL TRANSACTIONS 3 31 CITIES ACROSS THE AMERICAS, EUROPE AND ASIA PACIFIC 3 Learn more at pgimrealestate.com

For Professional Investors only. All investments involve risk, including the possible loss of capital.

The information contained herein is provided by PGIM, Inc., the principal asset management business of Prudential Financial, Inc. (PFI), and an investment adviser registered with the US Securities and Exchange Commission. PFI is not affiliated in any manner with Prudential plc, a company incorporated in the United Kingdom.

PGIM Limited registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR is authorised and regulated by the Financial Conduct Authority of the United Kingdom (registration number 193418) and duly passported in various jurisdictions in the EEA. These materials are issued to persons who are professional clients or eligible counterparties for the purposes of the Financial Conduct Authority’s Conduct of Business Sourcebook. In certain countries in Asia, information is presented by PGIM Singapore, a Singapore investment manager registered with and licensed by the Monetary Authority of Singapore. In Japan, information is presented by PIMJ, registered investment adviser with the Japanese Financial Services Agency. In South Korea, information is presented by PGIM, Inc., which is licensed to provide discretionary investment management services directly to South Korean investors. In Hong Kong, information is presented by representatives of PGIM (Hong Kong) Limited, a regulated entity with the Securities and Futures Commission in Hong Kong to professional investors as defined in Part 1 of Schedule 1 of the Securities and Futures Ordinance. © 2019 PFI and its related entities. 1 Pensions & Investments, October 2018. 2 As of December 31, 2018. Inclusive of PGIM Real Estate and PGIM Real Estate Finance AUM and AUA. PGIM Real Estate gross AUM is $72.7 billion ($50.8 billion net). AUA equals $33.1 billion.3 Data as of December 31, 2018. Represents PGIM’s global real estate platform including PGIM Real Estate and PGIM Real Estate Finance.

19KESKO-BALMVT

16_WhoWeAre_Pramerica_UrbanLand_8x10.indd 1 C1-11+spine_Asia19.indd 3

4/19/19 9:58 AM 5/9/19 2:16 PM

T:10.875”

S:10.625”

As part of PGIM, the second largest real estate manager in the world,1 we offer deep local knowledge with a global scale. Our research-driven, disciplined investment process is designed to create exceptional value for clients across economic cycles.

u

UR

VO

ED

El

eli

CO

Ja

jam

Da

da

CR

Be

SE AN

M

ma

VI CI

Co

co

ON

Br

br

PR

Cr

cra

SE

M

+1

AD

Se

+1

Ur fou Se St 49 Ins La Ins thr or

Op ap or of Ad do Ur La un of an or Ar em Le uli cla ca an req raz Ur bre

Po tio Div ing at fic

Ur ori La

C1-11+spine_Asia19.indd 4

5/9/19 2:16 PM

urbanland® U R B A N L A N D. U L I .O R G VO L U M E 2 , N U M B E R 1

PUBLISHER

Adam Smolyar

ASIA PACIFIC 2019

urbanland VO L U M E 2 , N U M B E R 1

®

U R B A N L A N D. U L I .O R G

E D I TO R I N C H I E F

Elizabeth Razzi

elizabeth.razzi@uli.org C O P Y E D I TO R S

James A. Mulligan

26 The Built Environment

David James Rose

Rising to meet the issues associated with rapid growth

james.mulligan@uli.org david.rose@uli.org

C R E AT I V E D I R E C TO R

Betsy Van Buskirk S E N I O R V I C E P R E S I D E N T, M A R K E T I N G A N D C O M M U N I C AT I O N S , A S I A PAC I F I C

May Chow

may.chow@uli.org V I C E P R E S I D E N T, C O N T E N T, A S I A PACIFIC

Colin Galloway

colin.galloway@uli.org O N L I N E E D I TO R / B O O K S E D I TO R

Brett Widness

brett.widness@uli.org P R O D U C T I O N D I R E C TO R

Craig Chapman

craig.chapman@uli.org S E N I O R M A N AG E R , G LO B A L A DV E R T I S I N G

Mary Sumner

+1 202-753-4777/mary.sumner@uli.org ADVERTISING COORDINATOR

Sean Wallisch

+1 240-743-8861/sean.wallisch@uli.org Urban Land® (ISSN 0042-0891) is published four times a year in January, April, June, and September by the Urban Land Institute, 2001 L Street, NW, Suite 200, Washington, DC 200364948; urbanland.uli.org ©2019 the Urban Land Institute, all rights reserved. Receipt of Urban Land is a benefit of membership in the Urban Land Institute. Single and multiple copies are available through ULI Publications Orders (1-800-321-5011 or e-mail: bookstore@uli.org).

Opinions expressed in articles or columns appearing in Urban Land are those of the author(s) or person(s) quoted and are not necessarily those of Urban Land or of the Urban Land Institute.

Advertisements appearing in the magazine do not constitute or imply endorsement by Urban Land or the Urban Land Institute. Urban Land assumes no responsibility for the loss of unsolicited manuscripts or graphics. The contents of this publication are protected by copyright and may not be reproduced in whole or in part or in any form without written authorisation.

Article proposals for Urban Land can be sent by email to Elizabeth Razzi (elizabeth.razzi@uli.org).

Letters can be sent by email to elizabeth.razzi@ uli.org. Submissions are subject to editing for clarity, style, and length. Urban Land’s editorial calendar, editorial and graphics specifications, and photo permission agreement forms can be requested from Elizabeth Razzi at elizabeth. razzi@uli.org. To request permission to reprint Urban Land articles, contact Brett Widness at brett.widness@uli.org.

Postmaster: Send address changes and circulation inquiries to Urban Land, Member Services Division, ULI, 2001 L Street, NW, Suite 200, Washington, DC 20036-4948. Periodicals postage paid at Washington, D.C., and additional mailing offices. Printed in the U.S.A. Urban Land print articles, along with additional original content, are posted regularly to the Urban

34 28 Southern China’s Greater Bay Area

34 Redefining Smart Buildings

MA R K COOPER

A LEX FR EW McMILLA N

The ambitious development plan promises great rewards, but faces multiple challenges in integrating diverse communities.

A truly smart building goes far beyond sensors and data collection to improve occupiers’ quality of life.

42 Bangkok: The Sinking City Faces Severe Climate Challenges R ON GLU CKMA N

Thais have long focused on the need for water management—but many are calling for more action.

46 Balancing Tourism and Sustainability across Asia R ON GLU CKMA N

As global tourism spreads to more remote locations, deliberate measures can create positive outcomes for the environment—and local cultures.

COVER: I N T E R C O N T I N E N TA L SHANGHAI WONDERLAND HOTEL. D E S I G N E D B Y AT K I N S I N PA R T N E R S H I P W I T H JADE+QA ON BEHALF OF SHIMAO PROPERTY GROUP P H O T O : AT K I N S

A S I A PAC I F I C 2 0 1 9

C1-11+spine_Asia19.indd 5

SOUTH KOREA

CHINA

THAILAND

HERITAGE AT INTER-CONTINENTAL DEALING WITH JEONJU SHANGHAI BANGKOK’S HANOK VILLAGE WONDERLAND HOTEL CLIMATE CHALLENGE

U R B A N LA N D

INTERVIEW

CHAIRMAN NICHOLAS BROOKE

5

5/9/19 2:31 PM

ASIA PACIFIC 2019

urbanland®

60 Landwrites

U L I G LO B A L B OA R D O F D I R E C TO R S Owen D. Thomas, ULI Global Chairman Thomas W. Toomey, Immediate Past Global Chairman Douglas D. Abbey, ULI Foundation Chairman John R. Chandler, ULI Americas Chairman Juergen Fenk, ULI EMEA Chairman Nicholas Brooke, ULI Asia Chairman W. Edward Walter, ULI Global Chief Executive Officer Thomas R. Arnold, Treasurer Peter Ballon, Secretary Marty Burger, At Large Goodwin Gaw, At Large Patricia Healy, At Large Anne Kavanagh, At Large Roy March, At Large Constance B. Moore, At Large Amy Price, At Large Wayne Ratkovich, At Large Ralph Rosenberg, At Large François X. Trausch, At Large

Prospects for Japan’s Capital and Real Estate Markets K E N N E T H FRI D LE Y

Economic headwinds are growing as the 2020 Summer Olympics draw near.

60 12 Developments

53 Interview

64 Back Page

Disruptive Technologies in Affordable Housing: The Case of Indonesia

ULI Asia Pacific Chairman Nicholas Brooke

InterContinental Shanghai Wonderland Hotel

CO LI N GA LLOWAY

MA R K COOPER

Reflections on a storied, globespanning career—and thoughts on today’s Hong Kong.

A luxury hotel in an abandoned quarry creates a splash.

56 Case Study

Departments

Jeonju Hanok Village: South Korea’s Heritage Showcase

9 CEO Perspective

ULI Philippines Real Estate Library Under Construction UrbanPlan in Asia Pacific ULI Best Practices Report Focuses on Hong Kong’s Site 3

18 ULX

K E NNETH R HEE

Tall and Taller R O N N Y R EN

Ten buildings ranging from 18 to 64 storeys model innovative ways to reach the sky.

10 This Issue

Public and private investment reclaimed the area’s cultural heritage. Increased tourism now challenges its authenticity.

registry of advertisers AECOM . . . . . Inside Back Cover www.aecom.com ALTO. . . . . . . . . . . . . . . . . . . . . . . 8 www.alto.co.kr Aon. . . . . . . . . . . . . . . . . . . . . . . 40 www.aon.com Brookfield . . . . . . . . . . . . . . . . . . 4 www.brookfield.com Chongbang . . . . . . . . . . . . . . . . . 7 www.daningdaning.com Cistri . . . . . . . . . . . . . . . . . . . . . 40 www.cistri.com Colliers . . . . . . . . . . . . . . . . . . . . 8 www2.colliers.com Hines . . . . . Inside Front Cover, 1 www.hines.com

HongKong Land . . . . . . . . . . . . . 2 www.hkland.com JLL. . . . . . . . . . . . . . . . . . . . . . . . .11 www.us.jll.com KaiLong . . . . . . . . . . . . . . . . . . . 23 kailongrei.com KKR . . . . . . . . . . . . . . . . . . . . . . 15 www.kkr.com Lead8. . . . . . . . . . . . . . . . . . . . . 23 www.lead-8.com Link Asset Management . . . . . 33 www.linkreit.com Nuveen . . . . . . . . . . . . . . . . . . . .11 www.nuveen.com Oval Partnership . . . . . . . . . . . 33 www.ovalpartnership.com

PGIM . . . . . . . . . . . . . . . . . . . . . . 3 www.pgim.com Proskauer . . . . . . . . . . . . . . . . . 41 www.proskauer.com Sasaki . . . . . . . . . . . . . . . . . . . . 41 www.sasaki.com Shui On . . . . Outside Back Cover www.shuion.com SWA Group . . . . . . . . . . . . . . . . 17 www.swagroup.com Tishman Speyer . . . . . . . . . . . . 15 www.tishmanspeyer.com

Urban Land® (ISSN 0042-0891) is published four times a year in January, April, June, and September by the Urban Land Institute, 2001 L Street, NW, Suite 200, Washington, DC 20036-4948; urbanland.uli.org ©2019 the Urban Land Institute, all rights reserved. Receipt of Urban Land is a benefit of membership in the Urban Land Institute. Single and multiple copies are available through ULI Publications Orders (800-321-5011 or email: bookstore@uli.org). Opinions expressed in articles or columns appearing in Urban Land are those of the author(s) or person(s) quoted and are not necessarily those of Urban Land or of the Urban Land Institute. Advertisements appearing in the magazine do not constitute or imply endorsement by Urban Land or the Urban Land Institute.

Urban Land assumes no responsibility for the loss of unsolicited manuscripts or graphics. The contents of this publication are protected by copyright and may not be reproduced in whole or in part or in any form without written authorization. Article proposals for Urban Land can be sent by email to Elizabeth Razzi (elizabeth.razzi@uli.org). Letters can be sent by email to elizabeth.razzi@uli.org. Submissions are subject to editing for clarity, style, and length.

Urban Land’s editorial calendar, editorial and graphics specifications, and photo permission agreement forms can be requested from Elizabeth Razzi at elizabeth.razzi@uli.org. To request permission to reprint Urban Land articles, contact Brett Widness at brett.widness@uli.org. Postmaster: Send address changes and circulation inquiries to Urban Land, Member Services Division, ULI, 2001 L Street, NW, Suite 200, Washington, DC 20036-4948. Periodicals postage paid at Washington, D.C., and additional mailing offices. Printed in the U.S.A.

6

U R B A N LA N D

C1-11+spine_Asia19.indd 6

A S I A PAC I F I C 2 0 1 9

W H O ’ S W H O AT U L I A N D T H E U L I F O U N DAT I O N The Urban Land Institute is a nonprofit education and research organisation that was founded in 1936. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide.

U L I G LO B A L G OV E R N I N G T R U S T E E S

Douglas D. Abbey; Stuart Ackerberg; Tetsuji Arimori; Thomas R. Arnold; Peter Ballon; Patricia Barrigan; Phil Belling; Gero Bergmann; Gary Berman; Stephan Bone-Winkel; Ryan Botjer; Jonathan H. Brinsden; Jürgen Bruns-Berentelg; Marty Burger; Robert G. Byron; Joseph C. Canizaro; Daniel M. Cashdan; Benjamin Cha; James J. Chaffin; Albert Chan; John R. Chandler; Nathalie Charles; Hei Ming Cheng; Christopher Choa; Donald Choi; Khoo Teng Chye; Simon Clark; Michael Cochran; Frank Cohen; Franz Colloredo-Mansfeld; Alison Cooke; Sarah Cooper; Clare De Briere; Xavier Denis; Jeffrey A. Dritley; Sigrid Duhamel; Scott Dunn; Ame Engelhart; David Faulkner; Kevin Faxon; Rosemary Feenan; Juergen Fenk; Antonio Fiol-Silva; Harry H. Frampton; Marnix Galle; Jeffrey Gates; Goodwin Gaw; Jonathan Geanakos; Alexander Gebauer; David Gilbert; Stuart Grant; Richard Green; Greenlaw Grupe; Greta Guggenheim; Mary M. Hager; Jill Hatton; Patricia Healy; Sophie HenleyPrice; Peter Holland; George Hongchoy; Jeffrey D. Horowitz; Karen Horstmann; Lars Huber; Brad M. Hutensky; Yu-Ning Hwang; Brian A. Jackson; Monica Jindia; Patrick Kanters; Anne Kavanagh; Michael F. Kelly; Richard A. Kessler; Phil Kim; James D. Klingbeil; Bryan J. Koop; Henrie W. Kotter; William Lashbrook; Ric Lewis; Thai Ker Liu; Jane Lloyd; Keith M. Locker; Mary K. Ludgin; Susan MacDonald; William C. MacDonald; Ian Mackie; Todd W. Mansfield; Roy Hilton March; Steven Marsh; Lauralee E. Martin; Robert Mathews; Jodie W. McLean; Michael McNamara; Sharmil Modi; Constance Moore; Brian Moran; Hiroo Mori; Kelly Sewell Nagel; Daniel M. Neidich; Dionne Nelson; Jeremy Newsum; Robert O’Brien; Blake G. Olafson; Philip Payne; Patrick L. Phillips; Kari Pitkin; Roger Platt; Amy G. Price; Richard T.G. Price; Stephen R. Quazzo; Dale Ramsden; I. Rocke Ransen; Deborah Ratner Salzberg; Alan F. Riffkin; Joseph B. Rose; Ralph Rosenberg; Wendy Rowden; Randall K. Rowe; Raymond Rufino; Peter S. Rummell; Christian Schede; N.H. Seek; Edward Siskind; John So; K.K. So; Hilary Spann; Michael Spies; Gayle Starr; Martin Stern; Van J. Stults; Jon Tanaka; Marilyn Jordan Taylor; J. Ronald Terwilliger; Lynn Thurber; Jaap Tonckens; Thomas W. Toomey; François X. Trausch; Bob van der Zande; D. Michael Van Konynenburg; Sophie van Oosterom; Guido Verhoef; W. Edward Walter; Megan Walters; K. Jay Weaver; Kavindi Wickremage; Leslie Woo; Takashi Yamamoto; Smedes York; Jon H. Zehner; Kevork A. Zoryan ULI LIFE TRUSTEES Nicholas Brooke; Joseph Brown; James DeFrancia; Wayne Doran; Robert Engstrom; Gerald Hines; Walt Koelbel; Stuart Lipton; Bowen McCoy; Alexander Otto; Henry Paparazzo; Wayne Ratkovich; Stan Ross; James Todd U L I F O U N DAT I O N B OA R D O F D I R E C TO R S Douglas D. Abbey, ULI Foundation Chairman Owen D. Thomas, ULI Global Chairman W. Edward Walter, ULI Global Chief Executive Officer Ralph Rosenberg, Treasurer Greg Vogel, Secretary Constance B. Moore, ULI Global Board of Directors Member Stephen C. Conley, Annual Fund Chair James D. Klingbeil, Chairman Emeritus Bruce Etkin, At Large Michael D. Fascitelli, At Large John Healy, At Large Stephen R. Quazzo, At Large Geoffrey Stack, At Large Jeffrey L. Swope, At Large Thomas W. Toomey, At Large U L I E X E C U T I V E S TA F F T E A M W. Edward Walter, Global Chief Executive Officer Gwyneth Cote, President, Americas Cheryl Cummins, Global Governance Officer John Fitzgerald, Chief Executive Officer, ULI Asia Pacific Phillip Horn, Chief Advancement Officer Adam Smolyar, Chief Marketing and Membership Officer Michael Terseck, Chief Financial Officer Lisette van Doorn, Chief Executive Officer, ULI EMEA U L I F E L LOW S Tom Murphy, Senior Resident Fellow, ULI/Klingbeil Family Chair for Urban Development Edward T. McMahon, Senior Resident Fellow, ULI/Charles Fraser Chair for Sustainable Development and Environmental Policy

5/9/19 2:16 PM

k;

E. ;

ck

h ; d;

an d

e

r

r

C1-11+spine_Asia19.indd 7

5/9/19 2:16 PM

ULI-Ad-201904-(W194xH1240mm)-v01 (output).pdf 1 23/04/2019 11:40:46

C

M

Y

CM

MY

CY

CMY

K

C1-11+spine_Asia19.indd 8

5/9/19 2:16 PM

ceoperspective ULI’s Ongoing Commitment to Growth As this year’s annual summit draws near, I am more convinced than ever of the importance of ULI’s mission-focused work in the Asia Pacific region—and of the value that the Institute’s unique John P. Fitzgerald Chief Executive Officer global platform ULI Asia Pacific offers to professionals in our industry.

Asia Pacific continues to undergo a process of rapid urbanisation, and the Institute is keeping pace with that change through an ongoing commitment to boosting staff levels and other resources across the region—a vital step in preparing us for a more active role in influencing local outcomes and agendas. ULI Asia Pacific is better placed than ever to engage with our members on a number of levels, helping them enhance their profiles, attract talent to their firms, and grow their businesses.

As CEO of ULI Asia Pacific, my objective is to make sure that our regional staff is well equipped to help members leverage the ULI platform. In practice, this means we are continuing to pursue a range of regional initiatives: l We have created operations in 10 gateway cities: Hong Kong, Shanghai, Beijing, Tokyo, Singapore, Sydney, Brisbane, Melbourne, Manila, and Seoul. l The ULI Asia Pacific Summit, our flagship event, is now the region’s premier industry conference, attracting more than 700 delegates from around the world. This year’s summit will be held June 11–13 in Shanghai. In addition to the usual twoday programme of concurrent and main-day sessions, the summit will feature a comprehensive set of study tours and a meeting of ULI’s Global Board of Directors. l In March, we hosted the inaugural ULI Asia Pacific Leadership Convivium in Shenzhen, China.

Defined as a “gathering with a convivial atmo-

sphere,” the convivium—which will be an annual occurrence—is an exclusive full-member leadership event that will serve as the platform for Asia Pacific product council meetings. l Annual conferences are now offered by our national councils in Tokyo, Shanghai, Hong Kong, Singapore, and Sydney. These events are focused on exploring topics of interest and relevance to local audiences and have become important drivers for member engagement and revenue. They are also a valuable resource for members seeking to do business in any of these markets. l National councils in Hong Kong, Singapore, and Manila have localised ULI’s UrbanPlan programme to cater to a range of different demographic and interest groups—in particular high schoolers, university students, and public officials. In addition, ULI Japan just held its first training event for UrbanPlan volunteers, and we expect it will also be rolling out events (focused at university-level institutions) in the near future. l Finally, we continue our work to establish local entities for the ULI Asia Pacific Foundation in Hong Kong, Singapore, and Australia. Over time, Foundation funding will be an important source of financial support for a range of impact initiatives in each of these markets.

All in all, it’s great to see land use professionals in the Asia Pacific region become increasingly important contributors to ULI’s thought leadership—and to the Institute’s growing influence around the globe. As we continue to evolve our resources and capabilities in regional markets— especially in China, our main near-term growth market—I am confident that ULI’s ability to effect change for the better will continue to grow in line with the expansion of our grass-roots membership base. UL John P. Fitzgerald Chief Executive, ULI Asia Pacific

A S I A PAC I F I C 2 0 1 9

C1-11+spine_Asia19.indd 9

U R B A N LA N D

9

5/9/19 2:16 PM

thisissue

Common Interests across a Vast Region It’s a pleasure to present our second annual Asia Pacific issue of Urban Land, distributed only to ULI members in the region—and to those attending the 2019 ULI Asia Pacific Summit in Shanghai. With this issue we hope to share ULI members’ thought leadership with their colleagues throughout the region.

Several articles deal with sustainability—a critical topic in a fast-growing area. Writer Ron Gluckman produced two takes on the topic, examining how the effects of climate change—a prospective worry for most cities around the world—present an immediate crisis in Bangkok. Whereas most attention to rising water levels focuses on coastal cities, Gluckman writes that in Bangkok “the effects of climate change are felt inland, along rivers and deltas, mainly in the crucial Chao Phraya River region. And Bangkok is particularly vulnerable, since this city of canals—called the Venice of Asia—is barely above sea level. Or it was. By some measures, it already has slipped below sea level; it is among the world’s fastest-sinking cities.” This insightful article begins on page 42.

The author also addresses an issue of increasing concern around the world: managing the effects of tourism. With consumer affluence rising in developing nations—and with a demographic surge among retirement-age people, now setting out to pursue their travel “bucket lists”—many cities and tourist sites are struggling with their own popularity. The article reviews

10

U R B A N LA N D

C1-11+spine_Asia19.indd 10

actions being taken by hotels and resorts to manage their use of resources, as well as the actions being taken to shield communities, beaches, and other public assets from harm. “Balancing Tourism and Sustainability across Asia” begins on page 46.

Mark Cooper continues Urban Land’s coverage of one of the most important land use issues in China— the complex plans for development of the Greater Bay Area, which comprises nine cities in the southern province of Guangdong, plus Hong Kong and Macau.

Cooper writes that China’s government wants to integrate these cities, clustered around the Pearl River Delta, into a single bay area—similar to regions encompassing New York City, Tokyo, and San Francisco—as a focus for innovation and economic growth. “The plan is also explicitly intended to bring Hong Kong and Macau, which each have tax and legal systems that differ from each other and from that of Mainland China, further into the orbit of the mainland,” Cooper writes. His report begins on page 28.

This special issue of Urban Land also presents a fascinating look at Jeonju Hanok Village, a cultural gem in Jeonju, about 200 kilometres (124 mi) south of Seoul, South Korea. Being named a historic preservation area in the late 1970s led, ironically, to deterioration of the village. Kenneth Rhee, executive director of ULI in Mainland China, details how public/private partnerships—with a focus on traditional Korean arts and crafts—helped restore and preserve the village, now popular with local artists and tourists. “Jeonju Hanok Village: South Korea’s Heritage Showcase” begins on page 56.

I would like to extend sincere thanks to my colleagues at ULI’s Asia Pacific headquarters in Hong Kong, particularly Colin Galloway, vice president for content, who developed these articles and worked with local writers to produce them. Not least, thank you to the advertisers who appear in this issue. It is the support of ULI’s members and sponsors that allows the organisation to share members’ thought leadership around the world through publications such as Urban Land—and events such as the 2019 Asia Pacific Summit in Shanghai. UL Elizabeth Razzi Editor in Chief

A S I A PAC I F I C 2 0 1 9

5/9/19 2:16 PM

ULI Sponsorship2019-v5-Path.indd 1

26/4/19 2:27 PM

Investing in skylines and bottom lines.

As a top five global manager of commercial real estate, it isn’t business as usual. It’s investing by example.

Visit nuveen.com/realestate Note our new name!

TH Real Estate is now Nuveen Real Estate.

ANREV/INREV/NCREIF Fund Manager Survey 2018; survey-illustrated rankings of 162 fund managers globally by AUM as of 31 Dec 2017.

Nuveen1423Nuveen_ULI APAC Summit.indd 1

C1-11+spine_Asia19.indd 11

632482-INV-Y-10/19

17/04/2019 16:13

5/9/19 2:16 PM

Disruptive Technologies in Affordable Housing: The Case of Indonesia Big data. Blockchain. E-wallets.

Drones. Artificial intelligence. These are terms one might expect to hear at a conference in Silicon Valley rather than in a discussion of Indonesia’s affordable housing challenges. Yet they were buzzing through the crowd at a Disruptive Technologies Workshop for Affordable Housing, an event organized by the Netherlands’ Human Cities Coalition and held in Jakarta in late 2018. iBuild Citizen-centric mobile application that facilitates home self-construction processes Who it is for Why it is needed

How it works

Why it is promising

12

City Planning Lab Affordable Housing Suitability Tool Geospatial planning tool that identifies optimal locations for affordable housing developments

Households, construction workers, contractors, lenders, developers, and policymakers.

Most housing is built by individuals since often that is the only affordable option. Access to credit is limited, and the construction sector is largely unorganised and informal. Government subsidies for self-build projects are difficult to track and highly vulnerable to fraud.

Who it is for

It uses a mobile platform to find contractors, source quotes for projects, purchase materials, track the progress of construction projects, rank quality of services, and make mobile payments to vendors. E-wallets help ensure that government subsidies are being used for the intended purpose.

How it works

•It empowers citizens to take control of the home construction process.

•It improves transparency, organisation, and competition in Indonesia’s informal and fragmented construction sector.

•It aggregates data on previously informal transactions to boost and inform policymaking.

U R B A N LA N D

Developments_Asia19.indd 12

Why it is needed

Spatial planning agencies, central and local government, and developers.

Government-subsidised housing projects are often poorly situated in locations that are far from central business districts, geographically risky, and lacking access to basic services and employment centres.

Combining geospatial and satellite data, this online tool allows users to generate a heat map that displays optimal locations based on a multihazard risk map and other critical factors such as access to employment activities and basic services such as education, health, and public transport.

Why it is •It boosts local government’s capacpromising ity to identify optimal locations for affordable housing.

•It facilitates collaborative and informed decision-making.

Indonesian cities are growing faster than most others in Asia, at an annual rate of 4.1 per cent.

However, the benefits of urbanisation—economic growth and poverty reduction—cannot be fully realised until the government increases access to basic services and invests in affordable housing. According to government policy guidelines, an estimated 820,000 to 1 million housing units are needed each year in Indonesia to meet demand between now and 2030.

Acute demand for affordable housing in Indonesia dovetails with the rapid development of its technology sector. A strong local startup culture has given rise to

several domestic tech giants such as Go-Jek, which started as a simple ride-hailing app for motorcycle taxis and expanded to offer more than a dozen services, including food delivery and mobile payments. Since its founding, Go-Jek has grown to a nearly $5 billion company, in the process revolutionising aspects of life in Indonesia’s cities and contributing to a booming gig economy.

The success of startups like Go-Jek suggests that homegrown tech players may be well positioned to leverage their familiarity with local markets to create custom solutions for chronic problems faced by developing economies, in particular those relating to housing.

IBM Blockchain Secure, transparent, and efficient digital ledger that streamlines land titling processes

Property PriceTag Use of Big Data and new technologies to track housing supply and demand for informed decision-making

Who it is for

Why it is needed

How it works

Why it is promising

Low-income and informal populations (i.e., groups who live outside officially designated neighborhoods), nongovernmental organisations, land planning agencies, and lenders.

Nearly 20 per cent of urban slum dwellers do not have formal tenure on their homes, which means they cannot access formal financing for home improvement. The process for obtaining this tenure in Indonesia is inefficient and costly.

Networks of community workers survey and map land/property ownership in a “fit for purpose” manner and use blockchain—a public, secure, and decentralised digital ledger—to streamline the mapping process and accelerate the land-titling process.

•It streamlines existing procedures and reduces the transaction costs for obtaining formal tenure.

•It provides a uniquely secure, transparent, and tamper-proof method of documentation.

Who it is for

Public agencies, developers, lenders, and other key stakeholders.

Why it is needed

Data on the housing market in Indonesia are scattered across different public and private agencies and are difficult to analyse in real time and on a large scale.

How it works

It consolidates large data sets from various sources, including public and private data and data gathered through innovative methods (i.e., trained artificial intelligence bots that can count the number of individual homes on satellite images).

Why it is promising

•It equips policymakers and companies to make more timely and informed decisions with regard to the housing market.

•Technologies will be incorporated into the development of the National Affordable Housing Program’s Housing Real Estate Information System, a real-time housing database used for decision-making by both the public and private sectors.

WORLD BANK

develop m

A S I A PAC I F I C 2 0 1 9

5/8/19 12:09 PM

p ments It is therefore instructive to look at a few of the promising pitches presented during the Jakarta workshop, detailed on the previous page. UL

DAO HARRISON is the senior housing specialist

for the World Bank, serving markets in the Asia Pacific region from the Singapore Hub for Infrastructure and Urban Development.

This article was originally published by the World Bank in 2018 as “Why Disruptive Technologies Matter for Affordable Housing: The Case of Indonesia.” ©World Bank. https://blogs.worldbank.org/eastasiapacific/ why-disruptive-technologies-matter-affordablehousing-case-indonesia. License: Creative Commons Attribution license (CC BY 3.0 IGO)

ULI Philippines Real Estate Library Under Construction

the BGC–ULI Public Library for Urban Sustainability (BU+PLUS), the new facility will be located on the covered roof-deck penthouse area of the DLSU Rufino Campus.

The library also fronts onto a large open-air patio area that can accommodate up to 80 people for events.

The library is scheduled to open by the third quarter of 2019.

When complete, the library will provide seating for up to 30 users and offer printed and digital material from the Asia Pacific region and the Americas. In particular, ULI Global and the Centre for Liveable Cities (Singapore) have donated a comprehensive selection of physi-

ULI Philippines, in partnership with De La Salle University (DLSU), Fort Bonifacio Development Corporation, and the Bases Conversion and Development Authority, is creating the first ULI Library outside the United States in Bonifacio COWORKING SPACE Global City (BGC), Manila. Named

cal books and real estate materials to support library content. Long term, the plan is to focus on developing the collection digitally, with access via an in-house server and over the internet. The new facility also will serve as a workplace for two ULI staffers who have begun providing layout and marketing services to the ULI Asia Pacific headquarters and national councils around the Asia Pacific region.

Envisioned as a hub for information and idea exchange for real estate students and professionals in both the country and the region, BU+PLUS will be a landmark project for ULI in the Asia Pacific. The project is a collaboration among multiple stakeholders who champion the same priorities: AIDEA, an all-Filipino design firm that is now one of the country’s largest design practices, designed the library under principal Jojo Tolentino; CWC International, a multiproduct comULI LIBRARY pany specialising in interior and architectural furnishing products, is the furniture partner.

The goal of the ULI Library is to become an important catalyst in promoting best practices, conducting research, and sharing content across the real estate industry on the local, regional, and global levels. The facility will double as a venue where ULI members and real estate practitioners can share insights and collaborate, and as the headquarters of ULI Philippines, in line with the organization’s mission of “Building better cities, together.” UL DLSU – RUFINO CAMPUS, BGC

2

Design Development

WORLD BANK

Entrance to the main library area

Jan. 29, 2019

LOUISE LASALA is coordinator of ULI Philippines.

UrbanPlan in Asia Pacific ULI’s signature education initiative, UrbanPlan, has been warmly welcomed since its recent debut in the Asia Pacific. Offered at three levels— high school, university, and public sector—workshops have been piloted in Hong Kong, Singapore, Manila, and Tokyo over the past year, with discussions underway to bring the initiative to Shanghai.

ULI Hong Kong debuted UrbanPlan at the secondary-school level in March 2018 at the Independent Schools Foundation (ISF) Academy in Pokfulam. Leveraging resources developed by UrbanPlan UK, a team of local volunteer facilitators delivered workshops in a one-day, six-hour format. This compares to the framework adopted in the U.S. programme, which is delivered in 15 classroom hours. It is designed to complement curriculums in business studies, geography, and social sciences.

Though students embraced the programme, a need to localize content became apparent because the UrbanPlan UK model, featuring a typical English town, is alien to most students in the Asia Pacific.

UrbanPlan HK was therefore developed to reflect the high-density, vertical built environments more familiar to local students, as well as to more accurately reflect community and social issues.

In November 2018, the ULI team returned to ISF Academy to test the localized version with the next group of 10th-grade students. Following positive responses from

A S I A PAC I F I C 2 0 1 9

Key Plan

Developments_Asia19.indd 13

9 ULI

|

Interior Design

|

21 February 2018

|

Aidea, Inc.

U R B A N LA N D

13

5/8/19 12:19 PM

developments ULI Best Practices Report Focuses on Hong Kong’s Site 3

students and teachers, the team is planning to test UrbanPlan HK at other schools, international and local, and to further improve the programme.

ULI Singapore undertook a similar year-long effort to customize the programme aimed at government officials, debuting its localized programme this February. ULI Philippines has also run pilots at the university and public official levels and is considering introducing a full university-level programme, as are ULI Japan and ULI China.

Delivering UrbanPlan would not be possible without the commitment of local sponsors. In particular, U.K.-based investor/developer Grosvenor, which has offered generous support for UrbanPlan in Europe, is sponsoring the Asia Pacific programme as its first corporate sponsor in the region. Efforts continue to identify other sponsors willing to contribute to the development of UrbanPlan throughout the Asia Pacific region. UL

Government authorities tendering large land packages for public purchase in the Asia Pacific region are usually focused on one overriding priority: obtaining the highest possible price. But while this approach serves various legitimate purposes—among them generating government revenue and boosting transparency—there are times when a more nuanced strategy may be preferable.

In particular, if the land constitutes an iconic site or it is an important gathering place for residents, there is scope for winning bids to be judged subjectively in terms of their overall benefit to the community rather than simply their cash value.

Hong Kong’s Site 3, a prime parcel of reclaimed waterfront land adjacent to the city’s central business district that is front and centre to an iconic view in Hong Kong, is one such site. With the parcel designated for tendering to developers in the near future and local

authorities apparently committed to a conventional finance-driven approach to the sale, ULI convened two workshops aimed at exploring best practices in such situations and identifying alternative tendering practices.

One workshop was attended by an invited assembly of international real estate experts, many already gathered in Hong Kong to attend last year’s ULI Asia Pacific Summit.

This was followed by a public engagement event open to everyone to sound out opinions of Hong Kong residents and grassroots organisations.

The findings of both events were condensed into a white

paper, Ten Principles for Creating a Development Brief for the Disposition and Development of Site 3 in Central, Hong Kong, which set out a number of alternative landtendering approaches for Site 3 in particular and for the Asia Pacific region in general. The report taps insight from experts with experience addressing—successfully and unsuccessfully—similar problems in other cities around the world and illustrates how community consultation can give the public a voice in decisions involving development of prominent public spaces. UL CO L I N G A L LOWAY is ULI Asia Pacific vice

president of content.

M A RT I N A I N G is a ULI consultant based in

Hong Kong.

14

U R B A N LA N D

Developments_Asia19.indd 14

A S I A PAC I F I C 2 0 1 9

5/8/19 12:09 PM

Developments_Asia19.indd 15

5/8/19 12:09 PM

ULI JAPAN FALL CONFERENCE 2019 ULIジャパン フォール・カンファレンス2019

Thursday, November 21 | Tokyo

SAVE THE DATE

Keynote Speaker:

David P. Manfredi FAIA, LEED AP CEO and Founding Principal Elkus Manfredi Architects

japanconference.uli.org

Developments_Asia19.indd 16

5/8/19 12:09 PM

B 韧

Beautifully Resilient 韧性至美

This public park introduces a network of boardwalk promenades amidst tidal wetlands in the Xiang River, allowing both people and the natural ecology to thrive. The park anticipates significant river fluctuation and periodic flooding, while providing respite from the surrounding urban development.

Client: Changsha Pilot Land Development and Construction Co. Ltd. Location: Changsha, Hunan Province, China Landscape Architect/Urban Designer: SWA

Designing for a Livable World Landscape Architecture, Planning and Urban Design

Developments_Asia19.indd 17

Contact: Business@swagroup.com

www.swagroup.com

5/8/19 12:09 PM

ulx

RON NYREN

Tall and Taller

Ten buildings ranging from 18 to 64 storeys model innovative ways to reach the sky.

High-rises can dominate the streetscape, but they can defer to it at the same time, making generous room at ground level for green spaces, mixing a variety of uses to encourage 24/7 activity, offering porous lobbies and pedestrian passageways to facilitate circulation through a city, and using curves, angles, setbacks, openings, and

fins to break up their massive size and modulate their monolithic appearance.

The following 10 projects in the Asia Pacific region—all completed during the past five years—include a hotel in a former quarry pit; towers that offer pedestrian-friendly access to shops, cafés, and restaurants at their bases; skyscrapers that offer

public amenities at their upper levels; a beauty company headquarters that features an art collection open to the public; and high-rises that incorporate trees and other vegetation at their bases, in terraces, on their roofs, or all three.

RON NYREN is a freelance architecture and urban

design writer based in the San Francisco Bay area.

1. 480 Queen Street BRISBANE, QUEENSLAND, AUSTRALIA

18

ULX_Asia19..indd 18

U R B A N LA N D

The building includes five levels of retail space and servicing areas, as well as a 10-storey volume and a 19-storey volume.

Parking for 270 vehicles is tucked into the basement. Trees grow on the building’s rooftop gathering space. The local offices of Dexus Wholesale Property Fund and Dexus Property Group own the building, which was designed by the local office of BVN and completed in 2016.

SCOTT BURROWS

CHRISTOPHER FREDERICK JONES

On a site that slopes down from historic St. John’s Cathedral to the Brisbane River, a former Australian Red Cross building and a nightclub were demolished for a development scheme that fell through after the 2008 recession. The site remained vacant until acquired by the local office of Grocon, which built a 31-storey tower that preserves views from the cathedral to the river and provides publicly accessible open space by means of a park at the fourth level and a through-block pedestrian path. Large-scale rainforest-themed murals surround the escalator leading from Queen Street up to the park, which is at the same height as the cathedral grounds across the street, preserving views to the river.

A S I A PAC I F I C 2 0 1 9

5/8/19 12:24 PM

2. Amorepacific Headquarters SEOUL, SOUTH KOREA

©NOSHE

The U.S. military’s former garrison in Seoul’s Yongsan District is being converted into a public park, and the surrounding area is earmarked for residential and commercial redevelopment. Local beauty company Amorepacific tapped the Berlin office of David Chipperfield Architects to create a new headquarters in the district giving the company a distinct identity while welcoming the public.

The 30-storey structure takes the form of a cube with rectangular openings at different levels on three sides. Terraces in the openings contain gardens with trees and seating areas. At the heart of

©NOSHE

the building, an elevated landscaped courtyard provides a gathering place for employees. At the street level, an array of public facilities includes an atrium that hosts art installations, concerts, and other events, plus an art library, an art museum, shops, and a tea room. The facades consist of floor-to-ceiling glazing surrounded by a veil of aluminum fins that mitigate solar heat gain while allowing views. Local firm Haeahn Architecture was executive architect. The building opened in 2017.

3. The Beacon HONG KONG, CHINA

Hong Kong’s Mongkok is one of the world’s most densely populated neighborhoods. In the years immediately after World War II, illegal iron balconies were added to many residential units to grant urban dwellers a bit of outdoor space and a chance to grow

A E DA S

A E DA S

SCOTT BURROWS

personal gardens. In designing the Beacon, a 128-room boutique hotel, the local office of Aedas took inspiration from this custom, fashioning a contemporary (and legal) reinterpretation of those balconies in the form of irregular glazed protrusions, which extend each unit toward the street and offer unimpeded views.

As a nod to the gardens commonly found on the balconies of old, the podium’s facade has a green wall. Ground-floor retail space helps activate the street. Completed in 2017, the 22-storey building occupies a 614-square-metre (6,610 sq ft) site and is set back from the street to provide additional space for landscaping.

A S I A PAC I F I C 2 0 1 9

ULX_Asia19..indd 19

U R B A N LA N D

19

5/8/19 12:24 PM

ulx 4. DUO SINGAPORE

a public observation deck and top-floor restaurant. The ground level includes a shopping center and a direct link to a mass rapid transit station. The concave building forms help channel cooling breezes through the site, and the facades are equipped with hexagonal sunshades that mitigate solar heat gain. Local firm DP Architects Pte was executive architect. DUO was completed in 2018.

IWAN BAAN

IWAN BAAN

Many of the high-rises surrounding Singapore’s historic Kampong Glam neighborhood are isolated towers with little connection to each other or to the nearby cluster of low-rise buildings dating to the 1820s. In designing the two towers of DUO for local developer M+S Pte, a joint venture of the Malaysian and Singaporean governments, the Hong Kong office of Buro Ole Scheeren shaped the buildings to respond to and connect with their context.

Buro Ole Scheeren gave the towers curving facades that cup a central garden plaza facing the existing Parkview Square office tower to the northwest. The residential tower rises 50 storeys; the office/hotel tower rises 39.

They include elevated landscaped terraces for hotel guests and residents as well as

5. Greenland Central Plaza ZHENGZHOU, CHINA

ZENG JIANGHE

BRETT BOARDMAN PHOTOGRAPHY

The Greenland Central Plaza complex includes two 63-storey office towers, their undulating facades notched every eighth floor by recessed “sky lobbies” that grant tenants access to the outdoors as high as 240 metres (790 ft) above ground.

Located close to the Qili River, a short walk from the Zhengzhou East Railway Station, the towers surround a central plaza and are flanked by L-shaped buildings that house commercial tenants.

An eight-storey atrium at the top of each tower accommodates art exhibitions, concerts, and other events; a three-level portion alongside each atrium, reached from the first-floor lobby via an express elevator, contains restaurants, shops, and a spa. The south tower also incorporates club facilities and apartments. All offices have access to natural ventilation.

Designed by gmp Architects von Gerkan, Marg, and Partners of Hamburg, Germany, with local partner TJADRI Group of Shanghai, Greenland Central Plaza was completed in 2016 for the Shanghai-based Shanghai Greenland Group.

20

ULX_Asia19..indd 20

U R B A N LA N D

A S I A PAC I F I C 2 0 1 9

5/8/19 12:24 PM

6. InterContinental Shanghai Wonderland Hotel

AT K I N S, M E M B E R O F T H E S N C - L AVA L I N G R O U P

The InterContinental Shanghai Wonderland Hotel has 18 storeys, but only two are visible from ground level.

The other floors hug the side of a formerly abandoned quarry pit. Located in the mountainous Songjiang district of Shanghai, the building was inspired by the Hanging Monastery, a fifth-century temple built into a cliff in Datong, China. The local office of Atkins, a member of the SNC-Lavalin Group, equipped the hotel with a vegetated roof to blend it into the landscape and modeled the undulating vertical glass atrium at the building’s heart after a waterfall.

The lowest two levels of rooms, submerged in water, contain a restaurant and guest rooms with aquarium views of fish in lieu of windows. Above the waterline, guestrooms look out toward a constructed waterfall on the opposite side of the pit. The hotel relies on geothermal and solar power for its energy supply; the thermal mass of the quarry’s rock face helps moderate interior temperatures. Built for Shanghai Shimao New Experience Development, the hotel opened in 2018.

(For more details, see "Intercontinental Shanghai Wonderland Hotel," page 64.)

AT K I N S, M E M B E R O F T H E S N C - L AVA L I N G R O U P

SHANGHAI, CHINA

7. International Towers Sydney SYDNEY, AUSTRALIA

The lobbies are open to the public and enable through-block passage. Pedestrian paths between the towers link the central business district to the western waterfront. Basement parking for the complex has only two entry points, leaving the surrounding streets easily accessible for pedestrians to encourage use of ground-floor shops. Sustainable strategies include a district cooling plant, a rainwater capture and reuse system, and a blackwater treatment plant.

BRETT BOARDMAN PHOTOGRAPHY

BRETT BOARDMAN PHOTOGRAPHY

The New South Wales government is redeveloping a former container wharf at the edge of Sydney’s central business district as the mixed-use district Barangaroo South. Rogers Stirk Harbour, based in London, was lead master planner for the project and designed International Towers Sydney, three towers that range from 40 to 51 storeys, for local developer Lendlease. Completed in 2016, the towers rest on a three-storey podium and together have the capacity to accommodate 23,000 office workers. Colorful fins on the exterior provide shading for the glazed exteriors.

A S I A PAC I F I C 2 0 1 9

ULX_Asia19..indd 21

U R B A N LA N D

21

5/8/19 12:24 PM

ulx 8. Raffles City Hangzhou Raffles City has a helipad on its roof and a direct connection to a subway stop at its base, but it also contains a mix of uses so varied that occupants may not have to travel much. The two twisting towers, rising 59 and 61 floors above ground, incorporate residences, offices, and a hotel, while the six-storey podium houses shops, restaurants, leisure and entertainment facilities, and structured parking. The Shanghai office of UNStudio configured the building plan in the form of two diagonal, intersecting figure eights, with the towers on opposite corners. Planted courtyards and a plaza with landscaped terraces help the development blend in with the nearby city park and the trees along the Qiantang River.

The podium’s atrium brings natural light to the lowest floors. Outdoor gardens at the upper levels of the podium include dining areas for the restaurants. The towers are clad in aluminum tiles, with vertical fins shading the curtain wall. Built for Singapore-based CapitaLand Limited, the complex was completed in 2017.

HUFTON+CROW

HANGZHOU, CHINA

SHENZHEN, CHINA

Singapore’s tallest building, the Tanjong Pagar Centre, occupies the heart of the city’s central business district, with historic Chinatown to the north and the Greater Southern Waterfront, a planned mixed-use mega-development, to the south. Local development company TPC Commercial Pte sited the structure above an existing underground mass rapid transit station and set aside 14,000 square metres (150,000 sq ft) for the redesigned Tanjong Pagar Park, which incorporates open space, shops, gathering spaces, and cafés.

The tallest portion of the complex, a 64-storey tower, is placed at the edge of the business district and contains offices and luxury residences. The 20-storey hotel steps down toward the low-rise buildings of Chinatown. A six-storey podium includes car parking; shops; restaurants; entertainment uses; a lobby for the offices, residences, and hotel; and a 3,000-squaremetre (32,000 sq ft) outdoor public art and event venue covered with a glass canopy that incorporates building-integrated photovoltaics. A through-block pedestrian corridor links the historic and modern neighborhoods on either side of the complex. Designed by the New York City office of Skidmore, Owings & Merrill, the Tanjong Pagar Centre opened in 2018.

Large tech companies tend to favor sprawling low-rise campuses in the suburbs, allowing plenty of indoor and outdoor areas for interaction.

With younger workers preferring city living, however, transportation becomes an issue. For its new headquarters in Shenzhen’s Nanshan District, internet company Tencent sought a building that included Silicon Valley–style community-building spaces for 12,000 workers but in high-rise form appropriate in such a dense urban setting.

The Los Angeles office of NBBJ and local architecture firm TJA configured the complex as two high-rises, 50 and 39 storeys tall, connected by three amenity-rich bridges, each topped with landscaped gardens.

The lowest bridge includes the lobby, meeting rooms, an exhibition space, and an auditorium. The middle bridge includes a running track and gymnasium. The highest bridge offers a training center, meditation rooms, and a library. Express elevators to the bridges encourage employees to use them to connect to local elevators, increasing chances for mingling. The lobby is open on two sides and publicly accessible, enabling shortcuts and easy access to shops and restaurants within. The building was completed in 2017.

22

ULX_Asia19..indd 22

U R B A N LA N D

©2018 TIM GRIFFITH

10. Tencent Seafront Towers

SINGAPORE

SOM/@ STUDIO PERIPHERY

9. Tanjong Pagar Centre

A S I A PAC I F I C 2 0 1 9

5/8/19 12:24 PM

www.kailongrei.com

Architecture · Interiors · Masterplanning · Graphics

We embrace simplicity, creativity and integrity.

T: +852 2283 0500 E: info@lead8.com www.lead8.com

MixC Shenzhen Bay – China

ULX_Asia19..indd 23

5/8/19 12:24 PM

ULI ASIA PACIFIC CORPORATE PROGRAMME

C

U

A

M PRESENCE IN ASIA PACIFIC

T re a

Seven National Councils across the region: Australia, China Mainland, Hong Kong, Japan, the Philippines, Singapore and South Korea

350 +

EVENTS ACROSS THE REGION

2,000 + MEMBERS

130 +

CORPORATE MEMBERS

ULI’S CORPORATE ENGAGEMENT OPPORTUNITY Corporate engagement offers your company dedicated account management and the advantage of interacting with ULI through:

MEMBERSHIP • BRANDING AND EVENTS • NETWORKING • THOUGHT LEADERSHIP

asia.uli.org ULX_Asia19..indd 24

5/8/19 12:24 PM

CONNEC T WITH THE WORLD OF RE AL ESTATE

ULI Europe Conference 2020 AMSTERDAM

3–5 FEBRUARY 2020

MEET THE TOP LEADERS IN REAL ESTATE The ULI Europe Conference brings together over 600 decision makers from all sectors of the real estate industry, including institutional investors, funders, developers, advisers, planners, architects and city leaders.

More information at:

europeconference.uli.org ULX_Asia19..indd 25

5/8/19 12:25 PM

The

Built Environment Rising to meet the issues associated with rapid growth

Shanghai.

26

U R B A N LA N D

AFeature_GreaterBay_Asia19.indd 26

A S I A PAC I F I C 2 0 1 9

5/9/19 2:19 PM

ZHAOJIANKANG

The Built Environment

A S I A PAC I F I C 2 0 1 9

AFeature_GreaterBay_Asia19.indd 27

U R B A N LA N D

27

5/9/19 2:19 PM

THE AMBITIOUS DEVELOPMENT PLAN PROMISES GREAT REWARDS, BUT FACES MULTIPLE CHALLENGES IN INTEGRATING DIVERSE COMMUNITIES. The economic development of China’s Greater Bay Area (GBA) is being driven by ambitious infrastructure projects, but the less tangible side of integrating the region’s cities offers the greatest challenge.

In February, China released its outline development plan for the GBA, which consists of nine cities in the southern province of Guangdong—Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing—and the special administrative regions of Hong Kong and Macau.

“We are all very committed to building a bay area economy which is open, international, which will

consist of an international innovation and technology hub, which has the personal support of President Xi Jinping,” said Carrie Lam, Hong Kong chief executive, introducing the plan to the public.

China’s government wants to integrate these cities, clustered around the Pearl River Delta, into a single bay area, similar to areas encompassing New York City, Tokyo, and San Francisco, as a focus for innovation and economic growth. The plan is also explicitly intended to bring Hong Kong and Macau— which each have tax and legal systems that differ from each other and from that of Mainland China— further into the orbit of the mainland.

Southern China’s

GreaterBayArea MARK COOPER

BING FENG WU_ISTOCK

Shenzhen.

28

U R B A N LA N D

AFeature_GreaterBay_Asia19.indd 28

A S I A PAC I F I C 2 0 1 9

5/9/19 2:19 PM

The Built Environment

Rail Line Reinforces Hong Kong’s Links to the Greater Bay Area Hong Kong’s new transport links to the Greater Bay Area indicate the direction of its future development, new research suggests.

Colliers International, in its report Hong Kong’s Expanding Links with the GBA: The Implications for Urban Development, asserts that the new high-speed rail infrastructure will free up a new development site in Kowloon and drive the creation of a third Hong Kong business district linked to Shenzhen.

The new rail links between Hong Kong and Guangzhou from West Kowloon station will make Hung Hom station in East Kowloon, which is currently linked to Guangzhou by slower rail services, redundant as

an international station, says report author Andrew Ness, a senior consultant to Colliers. Redeveloping the station to serve only local lines would free up most of the eighthectare (20 ac) site.

In the long term, the Hong Kong government’s Lantau Tomorrow Vision (LTV) plan envisions reclaiming 1,700 hectares (4,200 ac) of land off the southwest coast of Lantau Island, next to Hong Kong and the location of the city’s airport. The reclaimed land will be used for a third central business district (CBD), following the core Central CBD and the new CBD2 in Kowloon.

“Some commentators argue that given the number of unsold sites in the Kai Tak Development area and still unrevitalized

The GBA has a population of 70 million (though some estimates claim 120 million) and accounts for 12 per cent of China’s gross domestic product (GDP), so it already makes a significant contribution to the economy even though it accounts for less than 1 per cent of the country’s land mass.

In addition to the mature economy of Hong Kong, Shenzhen and Guangzhou have been drivers of regional growth. Shenzhen has special economic zone status, which has helped it grow to a population of 12 million over the past 30 years. Guangzhou has become the region’s manufacturing hub, and many factories have relocated there from Hong Kong.

However, China needs more from the region as the nation’s overall growth slows. China’s GDP growth, which averaged 8 to 10 per cent in the early 2000s, is forecast by the World Bank to drop to 6.2 per cent this year. Many economists are sceptical about that projection: London-based economic research consultancy Capital Economics, for example, believes China’s GDP will only grow 4 to 4.5 per cent this year. Regardless of the actual number, China is under pressure to deliver growth, and integration of the GBA is intended to deliver a boost.

By integrating the region, the government wants to expand high-value businesses such as technology, finance, and tourism in the four key cities of Shenzhen, Guangzhou, Hong Kong, and Macau and hopes lower-value businesses from those cities will migrate to the less-developed cities of Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen,

industrial properties in the older industrial areas of CBD2, there is no pressing need to create a large-scale third core business district,” Ness wrote in the report.

“Hence, we believe the real but unstated ‘vision’ behind the LTV project is a plan to capture the substantial rise in future office demand from the positive synergy arising from increased interaction between the GBA’s two leading office hubs.”

He predicts that the third CBD will be linked to Hong Kong Island to the west, and to the north to the Shenzhen district of Qianhai, a free trade zone cited in the GBA outline development plan as a focus for both economic growth and for cooperation between Hong Kong and Shenzhen.—M.C.

and Zhaoqing. Beijing’s economic ambitions for the GBA are remarkably specific: the GBA development plan states that the region’s GDP should hit $4.62 billion by 2035, surpassing the projected GDP figures for Tokyo and New York City for that year.

Integration of the GBA will be the main investment theme for real estate in Southern China in the coming years, so it was the centre of discussions at ULI’s first Asia Pacific Leadership Convivium, held in Shenzhen during March.

“We can expect to see [that] there will be a huge inflow of capital—financial capital, human capital— from the rest of China and from the rest of the world into this region,” Marcos Chan, head of research for Southern China and Hong Kong at CBRE, said at the convivium.

Investment in infrastructure is the primary means of generating these flows. China began planning integration of the GBA in 2008 and set about building new roads, bridges, and high-speed rail links.

The GBA is currently served by 1,640 kilometres (1,019 mi) of intraregional and intercity trains.

Upon completion of the 10 railway projects now under construction, this network will grow to 2,370 kilometres (1,500 mi), bringing most cities in the region within one hour of Hong Kong, Shenzhen, and Guangzhou. For example, the high-speed rail link between Guangzhou and Shenzhen has brought travel times down to 47 minutes from two hours.

The outline development plan predicts an overspill effect from the more prosperous hub cities. Hei A S I A PAC I F I C 2 0 1 9

AFeature_GreaterBay_Asia19.indd 29

U R B A N LA N D

29

5/9/19 2:19 PM

“The brisk growth of Guangzhou and Shenzhen will have a significant spillover effect on neighbouring cities, driving population growth and industrial upgrading. This will facilitate economic development and boost property demand.

Dongguan and Foshan will likely benefit the most in this regard, along with Huizhou.”—MARCOS CHAN, CBRE Ming Cheng, founder and chief executive of Hong Kong–based China investment manager KaiLong, noted at the convivium that the cost of an apartment in Hong Kong is more than twice per square foot that of one in Shenzhen, and Guangzhou apartments are half again that cost. “So if you cannot afford to live in Hong Kong, you can move to Shenzhen or Guangzhou or from Shenzhen to Guangzhou. You can still get to work in an hour.”

Hei suggested that Hong Kong, Shenzhen, and Guangzhou will be the major beneficiaries of the GBA integration. “In the medium to long term, Shenzhen and Guangzhou have the highest potential,” Hei said. “We have been looking at investing in both cities. I am a big believer in Shenzhen.”

Chan said growth in those two cities will, in turn, spread to other cities. “The brisk growth of Guangzhou and Shenzhen will have a significant spillover effect on neighbouring cities, driving population growth and industrial upgrading,” he said. “This will facilitate economic development and boost property demand. Dongguan and Foshan will likely benefit the most in this regard, along with Huizhou.”

Between July 2017 and January 2018, residential property prices in Foshan rose 35 per cent, the biggest increase among all the cities in the GBA, according to Hong Kong real estate broker Centaline.

Measures introduced to cool residential property prices in neighbouring Guangzhou are partly responsible, but prices in Foshan are also little more than half those in Guangzhou. This effect suggests both that the integration of the GBA is starting to work and that real estate investors might look to the secondary cities to find the best value.

The GBA offers Hong Kong’s developers a prime chance to expand their businesses, said Chan. “The Chinese government has set aside plenty of land for future economic development,” he said. “This is particularly important for Hong Kong–based developers because if they just focus on Hong Kong, then they can only compete for less than one square 30

U R B A N LA N D

AFeature_GreaterBay_Asia19.indd 30

kilometre [0.4 sq mi] of development land, whereas 700 sq kilometres [270 sq mi] has been set aside for development in the rest of the GBA.” While billions of dollars have been spent on the physical integration of the GBA, the administrative links will be harder to forge. “It is not an easy task,” Hei said. “There are a lot of challenges to get over.

There are three different social systems, three different tax and legal jurisdictions, and three currencies.“ The outline development plan indicates that the Chinese government does not envision total freedom of movement in the GBA. A number of measures will make it easier for residents of Hong Kong and Macau to live in Guangdong, but residents of Mainland China will not have the same freedoms in Hong Kong.

Taxation will also be a problem. Hong Kong imposes a flat 15 per cent income tax, whereas Mainland Chinese workers pay a top rate of 45 per cent.

Plans have been introduced to allow senior Hong Kong professionals tax rebates if they live and work in Guangdong, but this will not apply to junior workers.

Concerns have been raised in Hong Kong about the status of “one country, two systems”—introduced following the British handover of Hong Kong to the People’s Republic of China in 1997—which maintains the city’s distinct status and its legal system based on British law. It is intended to be maintained until 2047, but widespread concerns exist that it will be eroded before then and the additional freedoms long enjoyed by Hong Kong residents will disappear.

The outline development plan makes repeated references to China’s “opening up” and the need to develop an “open economy,” indicating a desire to continue with China’s moves towards a more market-based economy. However, there are no similar mentions of any intent to make Chinese society more open or to change its legal system to move towards the Hong Kong model.

Concerns were raised at the convivium that Hong Kong real estate prices might fall as people and companies move to take advantage of cheaper property and higher growth in the GBA. Nonetheless, both Chan and Hei insisted that Hong Kong property will be a major beneficiary of the integration.

Furthermore, Hong Kong’s plans for a third central

A S I A PAC I F I C 2 0 1 9

5/9/19 2:19 PM

“

SHUTTERSTOCK

The Built Environment

business district built on reclaimed land suggest that the city authorities are more concerned about undersupply of real estate than oversupply.

Undoubtedly there will be GBA winners and losers, says Chan. “Individual cities will undergo very different development paths, subject to their own industry base and locality,” he said. “Much of the future economic activity and resources will be concentrated in the central part of the GBA alongside the two coasts of the Pearl River.”

Another criticism of the plan is that it is too abstract, setting out a series of ambitions but not giving much indication about how they will be achieved. However, Hei said, “the outline development plan is not meant to explain every detail, but it shows that the government recognises what needs to be done.”

Doubts also exist about the usefulness of all the infrastructure that has been built. The 55-kilometre (34 mi) Hong Kong–Zhuhai–Macau Bridge, completed last year at a cost of nearly $19 billion, is the most noticeable physical manifestation of GBA integration. However, it is also a symbol of the difficulties, first because it connects two areas where motorists drive on the left side of the road—Hong Kong and Macau—with Zhuhai, where motorists drive on the right-hand side; the bridge is also designed for driving on the right side, thus requiring crossing viaducts.

Furthermore, only 10,000 permits are available for private vehicles to travel from Hong Kong to Mainland China and only 300 permits for vehicles travelling to Macau. The restrictions have environ-

mental justifications—Macau already suffers from traffic congestion—but are contrary to the ambition for an integrated region.

The 63-hectare (155 acre) artificial island that houses the Hong Kong–Zhuhai border crossing has also been criticised for leaving most of the created space empty of development. Even Hong Kong chief executive Lam has criticised the waste of space.

“We spent so much effort reclaiming this piece of land, and there is only one thing on this island—the public facility,” she said during a question-andanswer session at the Hong Kong Legislative Council earlier this year. “It does not fit with my idea of using the land to the fullest extent.”

Chan noted that “investing in the GBA is not riskfree. While the planning framework and development blueprint suggest a very promising outlook for the region, uncertainties lie in the way the plan will be implemented and, hence, the effectiveness of government policies,” he said.

“Market transparency and professional standards are also not synchronised in many aspects and require action from authorities and professional bodies. While the region has many world-class infrastructure projects and policy initiatives in the pipeline that will create synergy between its various cities, there is still much for the government and other market stakeholders to do before the GBA can emerge into a truly global bay-area economy.” UL MARK COOPER

is a freelance real estate journalist based in

Hong Kong.

A S I A PAC I F I C 2 0 1 9

AFeature_GreaterBay_Asia19.indd 31

The new Hong Kong– Zhuhai–Macau Bridge links the east and west sides of the Pearl River Delta.

U R B A N LA N D

31

5/9/19 2:19 PM

2020

ULI ASIA PACIFIC SUMMIT

Connect with the world of real estate

26–28 May 2020

GRAND HYATT I TOKYO, JAPAN

APACSUMMIT.ULI.ORG

AFeature_GreaterBay_Asia19.indd 32

5/9/19 2:19 PM

0

N

AFeature_GreaterBay_Asia19.indd 33

5/9/19 2:20 PM

JONES LANG LASALLE

Redefining

Smart Buildings ALEX FREW McMILLAN

A TRULY SMART BUILDING GOES FAR BEYOND SENSORS AND DATA COLLECTION TO IMPROVE OCCUPIERS’ QUALITY OF LIFE. Visit the Jones Lang LaSalle (JLL) office in Shanghai, and you will find that the fit-out of the space in the HKRI Taikoo Hui development qualified it as the first property in Asia to win Platinum WELL recognition, awarded by the International WELL Building Institute for JLL’s commitment to the health and well-being of the space’s occupants.

However, you may not immediately notice you have entered an office. Like a trendy hotel or movie theatre, the JLL space has no traditional front desk.

Visitors move straight into an open-plan lounge with a double-sided island sofa and plush chairs. The “reception desk” is a four-seat table set to the side 34

U R B A N LA N D

AFeature_McMillan_Asia19.indd 34

of a large stand-alone transparent digital screen, past which you will immediately see floor-to-ceiling windows and bar seats in an open-plan area.

The JLL logo and colors are the key features the space shares with a traditional office. Elsewhere, there is the gray, hot-desk bank of office tables, as well as computer screens with ergonomic chairs and sit/stand desks. Other work areas include a café with a reclaimed-wood floor and collaboration booths that would be at home in first class on Singapore Airlines.

Another design feature is the “15-minute room,” a bright-yellow enclosed office that is standing-room

A S I A PAC I F I C 2 0 1 9

5/9/19 9:58 AM

JONES LANG LASALLE

only—a comfy “padded cell” with wall mounts to lean on. It also accommodates about 15 people, a typical team size, with the lights timed to go off after 15 minutes—the length of the typical human attention span. It cannot be booked ahead of time, unlike other spaces in the office.

This is one face of how smart buildings operate in Asia today. The structure both accommodates and guides its occupants. It enables them to do what they want to do and encourages them to do it right. Besides WELL status for its benefits to physical and mental health, the office has also earned a Platinum rating under the Leadership in Energy and Environmental Design (LEED) system, devised by the U.S. Green Building Council, for its commitment to sustainability and the environment.

It certainly takes effort and expense to achieve such designations. But JLL, as a company advising multinationals such as the insurer Prudential and home furnishings retailer IKEA on how to design their spaces, believed it had to “walk the talk,” says Anthony Couse, the company’s Asia Pacific chief executive officer. The company committed to producing a “sustainable workplace that is healthy and productive for our clients and our people, and that puts the human experience at its heart,” he says.

What Is a Smart Building?

Companies such as Citigroup and property developers Grosvenor and Lendlease are increasingly deciding that the added investment to get thirdparty “well” certifications is more than paid back by greater productivity and loyalty from staff. At the root of this drive has been a shift in thinking about what it means for a building to be smart.

The word means different things to different people, notes Eli Konvitz, director of urban development and design for Asia at Atkins, a U.K.-based design, engineering, and project management consulting firm. Smart started as a supply-side idea driven by big tech companies trying to sell sensors, infrastructure, and services based on the premise that Big Data would transform cities. Today, however, the concept is shifting to encompass an ongoing flux of factors like design, governance, implementation, and, yes, technology that all work for people.

JONES LANG LASALLE

The Built Environment

The reality is that, in the age of the millennial, people want to live and work in more-sustainable, healthier, livable, better-governed, and efficient places. Under this expanded meaning of the term, smart should lead to human benefit—not to a vast machine that ultimately is just a tool. “That shift in thinking is key, as it takes us back to what we’re trying to achieve and for whom we’re doing it,” Konvitz says.

The first step in creating smart buildings in Asia may have to be taken at the government level.

Regulators likely need to mandate improvements in the region’s existing structures and generally poor building standards. “For every Citi Tower, how many bog-standard [basic] housing blocks or commercial buildings are built with no insulation, single glazing, and inefficient HVAC systems?” Konvitz asks.

That said, the basics of building smart are not expensive, and not even new: in Europe, insulation and double glazing are already mandatory. In Asia, these elements could be mandated for heat repulsion rather than insulation in order to dispense with the need for every apartment to have multiple air conditioners, as well as for noise reduction. “Is there a route to advocating a new approach to our quotidian buildings—the 99 percent of structures that don’t get all the attention?” Konvitz asks.

The buildings that do get all the attention get it for good reason. In the outfitting of Citi Tower, the U.S.-based bank’s new office on Hong Kong’s Kowloon harborfront, the extra expense for smart features that achieve a certification such as WELL is “not that material in cost,” asserts Duncan Macintyre, head of Citi Realty Services in Hong Kong. It was a fit-out that had to be done right anyway on a building Citigroup bought as a shell.

A S I A PAC I F I C 2 0 1 9

AFeature_McMillan_Asia19.indd 35

Facing page and above: The JLL office in Shanghai was the first in Asia to achieve Platinum WELL recognition from the International WELL Building Institute.

U R B A N LA N D

35

5/9/19 9:58 AM

CITIGROUP/ULSO HIN SING TSANG

He questions, though, whether any tenant would retrofit a space it does not own.

Today, some of the most innovative design and architectural adaptations are applying research from fields as diverse as physiology, biology, and psychology to frame how buildings are planned and built. But while these may work in theory, in the field, experts are working to establish how those adaptations pay off.

Those efforts will be abetted by the opening in Beijing this year of the world’s second Well Living Lab. Like the first Well Living Lab, in Rochester, Minnesota, the Beijing project is a collaboration between the Mayo Clinic network, which cares for 1 million patients a year, and Delos, the company behind the creation of the WELL standards. Well Living Lab (China), known as WLL China, recently completed its building in the Chinese capital and is targeting a soft launch this July.

The 2,300-square-metre (25,000 sq ft) WLL China will study the integration of building design, behavior, and health sciences. It aims to monitor, test, and quantify, through the use of a reconfigurable lab chock full of sensors, how human subjects respond to various simulated real-world environments. The building also will respond to how the subjects act.

36

U R B A N LA N D

AFeature_McMillan_Asia19.indd 36

The Beijing lab consists of 15 experiment areas in which to conduct trials on indoor environments, mimicking healthy offices and homes, senior apartments, long-term lease apartments, hotels, shared space, and schools. It also has a rooftop lab that can rotate 360 degrees, allowing scientists to test conditions under any orientation. Researchers at the facility will then use that data to suggest ways to improve indoor environments in order to boost human health, well-being, comfort, and performance in various guises.

The green premium on buildings with environmental certifications such as LEED is far better established than that with the kind of lifestyle enhancements judged by WELL. It is also far easier to measure whether a building is operating sustainably by reducing its energy use and carbon footprint, with the latest buildings recycling water and reusing raw materials, as well as generating some of their own energy.

Using the Data When implementing wellness solutions, companies want to know how installing a better air filter and improving the quality of light will ultimately affect their top and bottom lines—“to say exactly how one particular intervention will give you X amount of money back,” says Alessandro Bisagni, founder and managing direc-

A S I A PAC I F I C 2 0 1 9

5/9/19 9:58 AM

“

CITIGROUP/ULSO HIN SING TSANG

This page and facing: Citi Tower, the new Hong Kong headquarters of U.S. bank Citi, is typical of a modern, WELL-certified Asian facility.

tor of Shanghai-based BEE Incorporations, which consults with companies on engineering and technology to create green and healthy buildings.

Well Living Labs will use fitness trackers on its test subjects, and some real-world companies are also starting to offer trackers to volunteer employees at pilot projects. If those health readings can be tied anonymously to human-resources software, aggregate data could show whether productivity is improving or the number of sick days is falling.

Reporting of employee satisfaction can track how employees themselves feel about the workplace.

All that tracking undoubtedly has the ring of Big Brother from George Orwell’s 1984. But privacy expectations are rapidly dwindling, and data kept anonymously may be acceptable: after all, people voluntarily share as much in gym fitness sessions, albeit not yet with their employers.

The question of privacy, and the lack of discussion about it, bothers Konvitz. “That data being collected is hugely valuable and can be used for many ends, with unprecedented potential for surveillance, as well as passed—or sold—on to different endusers, . . . and this just doesn’t seem to be a part of the conversation,” he says.

CITIGROUP/ULSO HIN SING TSANG

CITIGROUP/ULSO HIN SING TSANG

The Built Environment

Data aggregation is also being done at the macro level. Klépierre, a French shopping mall real estate investment trust, in February said it would apply the Building Research Establishment Environmental Assessment Method (BREEAM) In-Use tracking system to all its malls so it can better understand environmental risks at its properties. It will then use the system to identify improvements across the company’s buildings to reduce exposure to environmental hazards. It also hopes that preparedness and third-party certification will boost the value of its retail holdings.

Environmental and sustainability assessments can be complex. The new frontier is to make data proactive rather than reactive. Machine learning can help drive better building performance, advocates believe, by suggesting modifications before A S I A PAC I F I C 2 0 1 9

AFeature_McMillan_Asia19.indd 37

U R B A N LA N D

37

5/9/19 9:58 AM

Monitoring Air Quality with QLEAR Simple tracking is solving mysteries already. Shanghai-based BEE Incorporations deployed the QLEAR air-quality monitoring system to help a school in Hong Kong that knew it had a problem with its air quality because students were falling ill. But handheld testing devices had not helped identify the cause.

However, constant monitoring of the air quality using QLEAR did. It highlighted a massive spike in the total volatile organic compounds suspended in the air at 7 p.m. every day. Between 6 a.m. and 8 a.m. the following day, the air quality would return to normal. But the air quality problem developed over the course of the week, until by Friday the air quality was no longer within safe limits. Fridays were also when the highest number of students got sick.

With that information, the problem was easily identified. The cleaning staff were coming in at 7 p.m., after the ventilation system was shut down and no students were in the building. That c­hemical-ridden air was then trapped until the ventilation system came on in the morning and flushed it out. But, over the course of the week, the chemicals gradually accumulated until they overwhelmed the system.

Further examination revealed that the cleaning staff had switched from specified cleaning agents to cheaper products.

The school reviewed the cleaning products being used, realized they were not the ones intended, and replaced them with the correct ones. The air-quality problem was swiftly resolved.

problems develop and offering smart prompts that reduce human error and improve maintenance.

Bisagni has helped develop a system called QLEAR to monitor air quality in a smart manner (see sidebar).

Tracking air quality in real time and then automating building systems to respond is proving particularly popular in China, where particulate readings are something of a national obsession and seemingly everyone tracks pollution levels on smartphone apps.

“There are so many variables, there are so many things that can go wrong,” he says. “If we see the carbon monoxide ratio is going to go up, the logical thing is to open the windows. But that depends on the air quality outside.”

The Psychology of Structures For all this newly collected data, though, there is an increasing realization that smart buildings are only as smart as humans. The psychology of structures, therefore, is becoming as important as their physical manifestation.

One example of this can be found at the three International Towers office skyscrapers at Barangaroo South in Sydney, the only projects with a WELL Platinum rating in the Pacific region. The developer, Lendlease, has also won WELL Platinum certification for the fit-out of the “tenancy” of its headquarters space in Tower Three. One of Australia’s largest developers, Lendlease operates the world’s top-rated fund for 38

U R B A N LA N D

AFeature_McMillan_Asia19.indd 38

Technology could further aid schools—or other institutions—in warding off similar situations. They could tag and track cleaning products as they are used throughout the building, ensuring that only approved products are used. Potentially, they could use blockchain to track where the products were made and every ingredient used in them.

With building materials, suppliers already voluntarily disclose their chemical ingredients on public databases such as Origin and Mindful Materials in order to improve customer confidence in their products.

Artificial intelligence could then build on air quality readings to monitor the complete environmental health of indoor environments. That would involve analysis of light and noise levels, human activity and movement, and other factors.—A.F.M.

sustainability, according to GRESB, an investor-driven organization that assesses the environmental, social, and governance performance of real estate worldwide. Lendlease also co-owns the Barangaroo buildings with the Canada Pension Plan Investment Board, so it qualifies as its own landlord.

University of Sydney psychologists who studied the Barangaroo South towers praised their interior design for moving beyond the open-plan, hot-desk office structure to create a flowing workspace designed to combine three basic human needs in the workspace—autonomy, competence, and relatedness. Their broader study found that a well-designed working layout and green working environment can increase organization productivity by 19 per cent, increase individual performance on cognitive tasks by more than 61 per cent, reduce respiratory complaints and headaches by 30 per cent, and help people sleep better.

Anthony Grant, a psychology professor who led the research, highlighted the Barangaroo International Towers as a well-being-oriented environment structured to “allow serendipitous ways of meeting,” with open spaces, visible gathering spaces, transparent activity rooms, and connectivity between areas where employees work and events occur.

Connection with Nature Another example of the psychology of structures is in Hong Kong. Located on the Kwun Tong waterfront,

A S I A PAC I F I C 2 0 1 9

5/9/19 9:58 AM

The Built Environment

Citi Tower also works to connect with its tenants mentally. The Citigroup-owned building has a lighting system designed to mimic the daylight schedule of the world outside so occupants feel as though they have experienced an entire day even if they remain indoors.

The building, the largest single building globally to win WELL recognition, stresses the need for biophilia, the biological concept of the human need for connection with nature. Banks of floor-toceiling windows combine with lights near windows that cheer up overcast days but dim if it is bright outside. Different hues of light are used in different parts of the building according to whether those areas are designed to be active or more restful.

Wood, slate, and stone finishes and flooring are used throughout the building, particularly outside the main office areas. Taps in the kitchen spaces and drinking fountains filter all water. People experience less stress and are more productive when they feel a connection to nature, Bisagni says, applauding the application of biophilia.

Citi says its Hong Kong employees emphasized in surveys the importance of air quality, a common issue throughout China, and the company went to great expense to implement air filtration and to ensure that the new fittings emit no harmful gases.

But Hong Kong employees also emphasized the desire for work/life balance and the need for activity during their daily routines.

The best healthy buildings provide options and are able to give occupants the occasional prod. Citi Tower includes sit/stand desks, which are popular when Hong Kong workers choose to stand after lunch. Slogans on the walls exhort people to take the stairs or to exercise. Because no individual trash containers are provided, employees must use recycling bins, which they have to get up to use. The Citi Tower restaurant sells no liquids in plastic bottles, provides no straws, and does not put plastic lids on drinks. Like Starbucks, it offers employees who bring their own container a discount on drinks.

But people are also creatures of habit, and some habits are hard to change. For example, the café consulted a nutritionist on its menu, then removed salt and monosodium glutamate (MSG) additives from its food, which resulted in employee com-

plaints (at first, anyway) that the menu was not as tasty without those addictive and unhealthy extras.

It took about five years for the financial implications of an environmentally friendly building to become clear and catch on, notes Jimmy Tong, an associate who works on sustainability at the engineering and project management firm Arup. It is now clear, though, that the financial benefits of making buildings healthy can be compelling. Tenants can attract and retain employees; landlords, meanwhile, can charge higher rents. In fact, recent research from CBRE has found that LEED-certified grade A offices in most Chinese cities now command a rental premium of 10 to 30 percent over noncertified rivals. In addition, multinational corporations are far more likely to occupy such buildings than those without certification.

Investors are also taking note. LaSalle Investment Management has concluded that green buildings should be able to command higher prices in part because they are less likely to become obsolete. As a result, the firm said, investors should consider accepting a yield 65 basis points lower on the “right property.”

Tong anticipates that a similar movement towards higher rents and lower buyer risk is now underway with wellness-friendly buildings. Health concerns about air quality, in particular, span many Asian nations, he notes, and it may be that employee and regulatory demand for greater health safety will drive healthy building development in the region.

At the end of the day, the smartest way people may be able to use smart buildings is to shape and improve their lives. Surely an economic justification for being smart and living well exists, but research and science need to establish it.

“That’s the point of these labs. What actions do we take that improve productivity? Then eventually we can get to a quantitative figure, then get to a monetary quality,” Bisagni says. “That’s the holy grail. Once we get to that figure, we are good to go.” UL A L E X F R E W M c M I L L A N is a Hong Kong–based foreign correspondent with more than two decades as a business reporter, feature writer, and editor, the last 14 years spent specialising in real estate coverage.

A S I A PAC I F I C 2 0 1 9

AFeature_McMillan_Asia19.indd 39

U R B A N LA N D 39

5/9/19 9:58 AM

Managing Real Estate Risk in Asia Aon’s Real Estate has unmatched expertise in designing and placing competitively priced insurance solutions. Starting with data-driven risk evaluation followed by fact-based risk advice, culminating in the intelligent design, and execution of insurance and risk management programmes, Aon delivers bespoke and innovative solutions that empowers clients to tackle today’s emerging real estate risks across Asia.

For more information, please contact andrew.bisconte@aon.com.

AFeature_McMillan_Asia19.indd 40

5/9/19 9:58 AM

We have more than 80 lawyers in Asia, the U.S. and Europe who handle complex, first-in-kind private equity real estate transactions worldwide for a broad spectrum of clients.

Key contacts: Yuval Tal Global Co-Head, Hospitality Group Head, Asia PERE and Hospitality Groups +852.3410.8008 | ytal@proskauer.com Jeffrey A. Horwitz Partner and Global Co-Head, PERE and Hospitality Groups +1.212.969.3229 | jhorwitz@proskauer.com Ying Li, Partner +852.3410.8088 | yli@proskauer.com

Hospitality Group Of The Year 2018 — Law360 “M&A Deal of the Year”: Formosa-IHG’s Acquisition of A Majority Stake in Regent Hotels & Resorts — HICAP 2018 Awarded and recognized for our work in the category of “Real Estate & REITs” — China Business Law Awards 2019

Joanne Owen, Partner +44.20.7280.2174 | jowen@proskauer.com Yong Ren, Partner +86.10.8572.1899 | yren@proskauer.com Albert W. Stemp, Partner +1.310.284.5601 | astemp@proskauer.com Jay C.S. Tai, Partner +852.3410.8010 | jtai@proskauer.com

Proskauer Rose LLP | Attorney Advertising Suite 5102, 51/F, Beijing Yintai Centre, Tower C, 2 Jianguomenwai Avenue, Chaoyang District, Beijing, 100022 | 86.10.8572.1800 Suites 1701-1705, 17F, Two Exchange Square, 8 Connaught Place Central, Hong Kong | 852.3410.8000

Proskauer.com

Prove What’s Possible www.sasaki.com

Wuhan Yangtze Riverfront Park, China

Planning | Urban Design | Landscape Architecture | Architecture | Interior Design Civil Engineering | Graphic Design | Place Branding | Data Science

AFeature_McMillan_Asia19.indd 41

5/9/19 9:58 AM

THAIS HAVE LONG FOCUSED ON THE NEED FOR WATER MANAGEMENT—BUT MANY ARE CALLING FOR MORE ACTION.

Bangkok

©ISTOCK

RON GLUCKMAN

The Sinking City Faces Severe Climate Challenges

Sceptics may question climate change, but in Bangkok, the impacts are already being felt—and are undeniable.

Rainy season used to be as predictable as the bountiful rice crop, showering Thai fields like clockwork from mid-April into October, when the weather abruptly flips and it becomes bone-dry for six months.

In recent years, though, rain has fallen unpredictably, causing flooding, damaging agriculture, destroying livelihoods, and threatening millions of people.

Meanwhile, temperatures are on the rise, and rapid urbanisation—combined with severe land subsidence—has put Bangkok on the watch list of the most vulnerable cities in Southeast Asia. However, events have focused attention, and some action, on the urgency of the problems. After a dev42

U R B A N LA N D

BFeature_ClimateChange_Asia19.indd 42

astating flood early this decade, Bangkok launched numerous government-backed plans to address ecological issues and enlisted an array of international partners.

Bangkok joined the 100 Resilient Cities project, which was established and funded by the Rockefeller Foundation and helps cities around the globe prepare for the myriad ecological and economic challenges of the 21st century.

“The government accepts that climate change is real,” says Supachai Tantikom, the chief resilience officer in Bangkok who was hired by the 100 Resilient Cities project as part of its standard agreement with cities in the project. In 2012, the government adopted a master plan that targets the reduction of carbon, traffic, and air pollution and the increasing of greenery.

The Sinking City Bangkok might seem a surprising addition to the climate change crisis list. Media coverage more often focuses on the impact of rising sea levels and surging tides on coastal residents, or on vulnerable low-lying islands. In Thailand, however, the effects of climate change are felt inland, along rivers and deltas, mainly in the crucial Chao Phraya River region. And Bangkok is particularly vulnerable, since this city of canals—called the Venice of Asia—is barely above sea level.

Or it was. By some measures, it already has slipped below sea level; it is among the world’s fastest-sinking cities.

The capital of Thailand is sinking by up to two centimetres (0.8 in) each year, threatening this city of nearly 10 million.

The Chao Phraya River has become prone

A S I A PAC I F I C 2 0 1 9

5/9/19 1:08 PM

©ISTOCK

The Built Environment

Opposite and right: Flooding in 2011 caused over 800 deaths and an estimated US$50 billion in losses. It affected 13 million people.

Need for Green and Permeable Surfaces And then there is the severity of land subsidence in an urban landscape where concrete continues to spread and swallow up scant greenery. Bangkok has been called Asia’s least green city, with a scant 3.3 square metres (36 sq ft) of green space per person, according to the Siemens Green City Index. By comparison, Singapore offers 66 square metres (710 sq ft) and even New York City provides 23.1 square metres (249 sq ft), according to the report.

Paving over so much of the city has drastically reduced the permeable area, accelerating the sinking; Bangkok is reportedly sinking 10 times faster than sea level is rising. As the metropolitan area continues to sprawl and embrace a population exceeding 15 million, much of the city is now only half a metre (1.6 ft) above sea level, and many parts are already below it.

While it all sounds dire, one constant involved in planning for climate change in Bangkok is the need for better management of water flows, dams, and drainage. Everything flows around the Chao Phraya River. The Bangkok Metropolitan Authority (BMA) and national government have already committed to a matrix of responses that include raising levels of riverbanks, providing more drainage canals, and better coordinating the nationwide system of storage facilities and waterways.

There also are proposals for more innovative measures, including digging new channels and building urban water storage systems.

Yet on the ground, those working hardest to meet the challenges of climate change concede that action has been slow. Climate change advocates noted that everyone remembers 2011, but there also is a tendency to think that those floods happened eight years ago—and there has not been flooding like that since.

© G DA G Y S / I S T O C K

to regular flooding, most critically in 2011, when heavy rains swelled waterways in the north, overflowing levies and swamping Bangkok for months. The 2011 flood caused over 800 deaths, cost an estimated US$50 billion, and affected 13 million people. The 2017 Global Climate Risk Index ranked Thailand among the top 10 countries in the world most affected by climate change.

The very survival of Bangkok is at stake as temperatures continue to rise each year, further contributing to rising water levels. The World Bank has predicted that 40 per cent of Bangkok could be inundated as early as 2030 due to extreme rainfall and changes in weather patterns.

One case study, from the 2017 Global Climate Risk Index by the nongovernmental organisation Germanwatch, looked at Bangkok, assuming a future temperature increase of four degrees Celsius. Under this scenario, the city would experience severe flooding, and around 40 per cent inundation by an extreme rainfall event and a 15-centimetre (6 in) sea-level rise (SLR) by 2030. Looking further, the study showed 70 per cent inundation and an 88-centimetre (35 in) SLR projected by 2080.

Concerns about flooding along the Chao Phraya River system are compounded by the surging seas expected with global warming. Thailand’s major water system irrigates much of the nation’s agriculture and provides sustenance to about half of the Thai population, including the urban sprawl from Bangkok through Samut Prakan, formerly a delta region prone to flooding and siltation for centuries.

The situation has always been unpredictable as evidenced by Wat Khun Samut Chin—sometimes called the Temple Sinking into the Sea. Once on land, the temple has been left on a tiny speck of an island, in a surging inland sea, thanks to erosion.

On shore are the remains of forts that were moved repeatedly, as riverbanks fell away over the years. Greenpeace estimates that the waters of the Gulf of Thailand are rising four millimetres (0.2 in) a year, far above the global average.

Waterflow Management Academics like Danny Marks say that history reveals a pattern of periodic flooding and droughts, “and Bangkok really isn’t doing much.” The Thai-American assistant professor of environmental studies at City University of Hong Kong has published numerous papers on the topic, and the ebbs and flows of the Chao Phraya River— by far the longest river in Thailand. Long ago dubbed “the Mother of All Rivers,” it has the prominence of the Nile, although it runs less than 400 kilometres (249 mi) from near Nakhon Sawan, where a trio of major upcountry rivers meet to form the Chao Phraya, which flows through Ayutthaya, down to Bangkok, and into the Gulf of Thailand.

More commonly called “the River of Kings,” it has been the lifeblood of the nation for centuries, connecting Ayutthaya—the ancient capital of Siam from the 14th century through the 18th century—to the newer capital of Bangkok.

The latter was chosen after Ayutthaya was sacked because Bangkok was deemed easier to defend, with the Chao Phraya rerouted in an early waterworks project to create a new, more easily protected channel through the new capital.

So, as Marks points out, current concerns about dredging, storage, and diversions are nothing new. Thais have been managing the river system—for better or worse—for centuries.

The challenge now is to do much better, and soon; that became obvious A S I A PAC I F I C 2 0 1 9

BFeature_ClimateChange_Asia19.indd 43

U R B A N LA N D

43

5/9/19 1:08 PM

LANDPROCESS

after the floods of 2011. Officials have reason to be cautious about water releases from upcountry, where a lack of water during the dry season can devastate the vital rice fields, which rely on extensive irrigation. But with heavy rains in 2011, and dams kept full with the dry months in mind, there was nowhere to release water until it was too late. Bangkok and other areas downriver were flooded for months.

Many industries fled to neighbouring countries and never returned. After the floods, more generous water releases were partially blamed for droughts.

The key, therefore, is to strike a balance between flood and drought. Over the next 35 years, the Royal Irrigation Department (RID) estimates that the area affected by floods will nearly triple, from 266,000 hectares (656,000 ac) to 660,000 hectares (1.63 million ac). Droughts will last longer, and major floods may occur as often as every seven years. Costs incurred by floods 44

U R B A N LA N D

BFeature_ClimateChange_Asia19.indd 44

LANDPROCESS

Above and right: Chulalongkorn University Centennial Park in central Bangkok is conceived partly for public recreation and partly as a water-retention facility capable of holding up to 3.8 million litres (1 million gal) of rainwater runoff.

A S I A PAC I F I C 2 0 1 9

5/9/19 1:08 PM

The Built Environment

LANDPROCESS

“The government accepts that climate change is real.”—SUPACHAI TANTIKOM, CHIEF RESILIENCE OFFICER

will skyrocket, the RID warned, from the present figure of about US$800 million per year, to US$5 billion annually.

“The projects we have in the pipeline are not just flood prevention measures, they also involve building facilities to store water for harvesting, which will help farmers during the dry season,” Deputy Prime Minister General Chatchai Sarikulya told the media during a recent trip to Chai Nat Province to address government plans.

Proposals include dredging and widening of drainage canals to the north of Bangkok, as well as construction of new waterways and storage facilities.

Other proposed projects include massive flood barriers, mainly around the capital, together with construction of what is effectively a new river—a 258-kilometrelong (160 mi), 160-metre-wide (525 ft) channel for US$6.5 billion—that would bypass Bangkok entirely. However, such schemes worry environmentalists and face heated opposition from local communities because of the enormous amount of relocations and land seizures that would be required.

LANDPROCESS

“Monkey’s Cheeks” One smaller plan that has gained wide international attention is an innovative water storage park built by Thai landscape architect Kotchakorn Voraakhom. With her firm, Landprocess, she has specialised in the design of parks, gardens, and green roofs. In 2017, she unveiled Chulalongkorn University Centennial Park, a green oasis on 4.5 hectares (11 ac) of university land, with an amphitheatre and museum. More impressive is what is underneath: storage for collecting and cleaning water. The park has what is called Thailand’s largest green roof, covered with native grass and weeds.

Besides providing more greenery and reducing the urban heat problem, the nearly 3.8 million litres (1 million gal) of storage could help with floods and drought.

Hailed for its innovation, the scheme is largely dismissed even by environmentalists as a well-meaning drop in the bucket. But the concept of water storage schemes—or, as Thais call them, “monkey’s cheeks”—is immensely popular.

This term was coined by King Bhumibol, Thailand’s beloved monarch, who reigned from 1946 until his death 70 years later.

The king noted that monkeys hold food in their mouths until they need to eat. He reasoned that Bangkok needed to store water until the city could use it.

Urban planners and environmentalists like to talk about monkey’s cheeks, but they have not taken the next step: requiring them. “It would be good to have monkey’s cheeks for every new high-rise,” says Banasopit Mekvichai, one of the region’s top urban planners, a professor at Chulalongkorn University, and former deputy governor of the Bangkok Metropolitan Administration. She supports more parks, green space, and retaining ponds.

The reality, though, is that Bangkok has actually been moving in the other direction. Since 2014, when the military staged a coup, big infrastructure projects have become a means of boosting the stagnant economy. IconSiam, the largest shopping mall in Southeast Asia, with two super-tall residential towers, recently opened right on the Chao Phraya River. At about US$1.7 billion, it was the largest project in Thai history, eclipsing the Chao Phraya Estates, another development with two huge luxury hotels and another skyscraper, also on the river. But both are small compared with One Bangkok, a massive, integrated US$3.5 billion project comprising offices, retail, hotels, and residences on the old Night Bazaar site, smack in the middle of the city.

All these projects, critics say, eat up land that might have provided more greenery and natural water circulation. “We need more permeable surfaces, like parks,” notes Diane Archer, who grew up in Bang-

kok and is a research fellow at the local office of the Stockholm Environment Institute. “The problems are only getting more prolonged as we pave over the canals, ponds, and greenery with concrete.”

Urban Heat Island Effect Paving over canals, ponds, and greenery with concrete also intensifies heat island effects, another concern related to climate change, where an urban area is much warmer than surrounding rural areas due to human activities. The difference is usually more significant at night and can be attributed to concrete and other materials that retain and then radiate heat, and the lack of shade, greenery, and cooling water.

Bangkok became intensely focused on similar issues earlier this year, amidst a horrid bout of air pollution. The skies were choked with smog, residents clamoured for air masks, and planes seeded the clouds in hopes of triggering rain while guards at high-rises used garden hoses in hopes of washing away the toxic pollution.

“It galvanised attention on some of the issues,” says Supachai Tantikom.

Pollution results from a variety of causes, including agricultural burning upcountry, but construction in the city kicks up storms of dust. In addition to all the real estate development, Bangkok is in the midst of a fivefold expansion of its outdated, 20-year-old subway system.

“When that is done, we should be in better shape,” he says. He concedes, however, that Bangkok needs more than hope.

“We really need to act on these plans.” UL R O N G L U C K M A N is an American journalist who has been working in Asia since 1991, writing for Forbes, Time, Newsweek, the New York Times, the Wall Street Journal, and other publications.

A S I A PAC I F I C 2 0 1 9

BFeature_ClimateChange_Asia19.indd 45

U R B A N LA N D

45

5/9/19 1:08 PM

RON GLUCKMAN

Feeding chickens may seem like a daffy activity at a luxury resort, but it proved so popular after its introduction at Six Senses Yao Noi in southern Thailand that the activity was added at other resorts in the upscale chain. More than a clucking distraction, the chickens really are part of the brand ethos.

“Guests like to see the chickens and can even pick out a fresh egg for their breakfast,” says Jeff Smith, vice president for sustainability at this chic, eco-conscious chain. Besides delivering organic eggs to the table (over 73,000 were served throughout the chain in 2018), Yao Noi also farms its own vegetables, herbs, and mushrooms. All Six Senses resorts bottle drinking water in recycled glass, reducing use of wasteful plastic bottles. Such policies put Six Senses at the forefront of a growing

trend towards more-sustainable tourism, yet Smith is not satisfied.

“We’re always setting new goals,” he says. One involves plastic: many resorts and restaurants now pride themselves on eliminating plastic straws, but Six Senses aims much higher—to be entirely plastic-free by 2022.

The chain’s process is methodical, with plastic as the main focus now, Styrofoam next. Each property has its own sustainability team, which inventories all use of plastic. As of March 2019, teams had identified an astounding 4.5 million plastic items, substituting nonplastic alternatives for nearly one-third of them.

Six Senses’ most impressive achievement to date may be its new Fiji resort, Six Senses Fiji, on Malolo Island, which was designed to be 100 percent solar powered, says Smith. Using a vast array of solar cells and Tesla batteries,

the resort has the largest micro-grid in the South Pacific, he says.

Sustainable by Design Opting for solar power at the outset was key. As global tourism expands to more remote locations and lodges seek to minimize their footprint, energy use is a crucial factor for success and style. In the Mergui Archipelago, an idyllic area of 800 islands off southern Myanmar, alternative energy guides the direction of development in a region sometimes labeled the Galapagos of Southeast Asia. Political isolation and a lack of infrastructure have protected the islands, which are still only accessible by boat tours from remote towns on the mainland.

One energy-focused development there is the Boulder Bay Eco-Resort on 135-hectare (334 acre) Nga Khin Nyo Gyee Island. Construction was limited

BalancingTourism and AS GLOBAL TOURISM SPREADS TO MORE REMOTE LOCATIONS, DELIBERATE MEASURES CAN CREATE POSITIVE OUTCOMES FOR THE ENVIRONMENT—AND LOCAL CULTURES.

46

U R B A N LA N D

A S I A PAC I F I C 2 0 1 9

BFeature_Gluckman_Asia19 (Conflicted copy from ULI-0396 on 2019-05-07).indd 46

5/9/19 2:46 PM

S

The Built Environment

ment’s life. Instead, Smith says, resorts typically recoup the cost of solar-cell investment within six years. “Sometimes simply aiming high is satisfying,” he says.

Sustainable Tourism Though sustainable tourism is clearly on the rise, it can also be difficult to define.

Proponents cite respect not only for the environment, but also the desire to minimize tourism’s impact on communities and local culture. The Global Sustainable Tourism Council (GSTC), a worldwide body that establishes standards for policymakers, hotels, and tour operators, provides guiding principles for businesses and destinations to help manage the world’s natural and cultural resources while ensuring that tourism is a force for good in promoting conservation and alleviating poverty. GSTC focuses on four

main areas: sustainable management, socioeconomic impacts, cultural impacts, and environmental impacts.

Asia lags in a movement that began in developed western countries, but GSTC says the region is catching up.

“We are seeing raised awareness in Asia,” says Randy Durband, the group’s chief executive officer. “Asia, like the rest of the world, is now moving down a path towards sustainable tourism that should have begun many years ago. For most Asian economies, we’re still in the early stage of raising awareness of the issues and have only recently begun to implement meaningful practices that could be considered sustainable.”

Concerns about sustainability have only intensified after environmental crises. Governments recently shut down popular Asian destinations like Boracay in the Philippines and Maya Bay in

Sustainability across Asia

S I X S E N S E S H O T E L S R E S O R T S S PA S

to 10 wooden bungalows, all tucked in the trees and almost invisible along the pristine shoreline. Power trickles in from a solar farm hidden on a hilltop so as not to obstruct dazzling views of the coves and beaches. Water comes from a spring. A lack of local resources means that such remote projects are necessarily built with efficient use in mind because the approach taken can determine the future of both the destination and local cultures. In this way, Myanmar is following the approach taken by the Maldives, issuing licenses for just one resort per island.

Starting on the right path at the outset is crucial. Smith says opting for alternative energy at the start provides a genuine opportunity for efficiency, whereas resorts that invest in generators become locked into using fossil fuel over the decades of the equip-

Beachfront of Six Senses resort, Malolo Island, Fiji.

A S I A PAC I F I C 2 0 1 9

BFeature_Gluckman_Asia19 (Conflicted copy from ULI-0396 on 2019-05-07).indd 47

U R B A N LA N D

47

5/9/19 2:46 PM

S I X S E N S E S H O T E L S R E S O R T S S PA S S I X S E N S E S H O T E L S R E S O R T S S PA S

Six Senses resort, Yao Noi, Thailand.

Six Senses resort, Yao Noi, Thailand.

Thailand because of over-tourism—too many visitors for the insufficient infrastructure, particularly lack of water and sewage treatment, resulting in sewage pouring straight into sea—and severe environmental damage caused 48

U R B A N LA N D

by a surge in the number of tourists from thousands to millions, with little improvement in insfrastructure.

“Closing beaches that have been overused wouldn’t need to happen today if yesterday there had been

proper planning and execution of sustainable policies, plus enforcement of existing laws relating to waste management,” says Durband. “The good news is that there is positive movement. The bad news is that much needs to be done, and we have not yet seen widespread evidence of turning words into action.”

One firm widely praised for boosting awareness and promoting action is Greenview, a global environmental data and consultancy firm with a Singapore office.

Offering myriad services to individual hotels and hotel chains, the firm issues periodic reports that compile data from its members, highlighting best practices and the latest innovations in sustainable tourism. It then helps its clients develop and implement sustainable strategies.

“Sometimes it’s just knowing more about your energy use and inefficiency,” says Ricaurte, founder and chief executive officer of Greenview.

A S I A PAC I F I C 2 0 1 9

BFeature_Gluckman_Asia19 (Conflicted copy from ULI-0396 on 2019-05-07).indd 48

5/9/19 2:46 PM

The Built Environment “It’s not the cost of developing a single-use plastic in Phuket hotels and resorts, including eliminating use of singleuse plastic bottles and straws by the end of this year. They also agreed to set up a community project to educate the island’s youth on critical problems involving use of plastic on the island.

The Hotel Owners for Tomorrow coalition has also been working on the systemic challenges to getting sustainability discussed at the beginning of investment decisions, Ricaurte said. Among the ideas that have come up are stipulating in the hotel management agreement with the operator that a percentage of revenues be dedicated to environmental or social issues, or both, and putting a sustainability coordinator on staff. Some chains, including Six Senses, already do this, he said.

Another company using technology to help the hospitality industry improve its record on sustainability is Winnow, a London organization that has expanded to Asia. By tracking food use for more than 1,000 kitchens in hotels and resorts worldwide, including large chains like AccorHotels, Marriott, IHG, and Hilton, Winnow has reported cutting waste in half.

The company’s Winnow Vision, an artificial intelligence–enabled system, can distinguish food waste automatically as it is discarded and identify the item, its weight,

WINNOW

A key facet of Greenview’s approach is benchmarking—for each property and by segment, or across the hospitality industry. this allows properties to set goals and guides them in making step-by-step advances. “A lot of time, hotels look at the entire picture, with a hundred criteria, and can be put off by the scope,” Ricaurte says. “But there are a lot of things they all can do.”

An example is night walk audits, during which property managers review energy use and efficiency at a time when they generally are not busy. “We use existing staff to go around the rooms checking obvious things like lights [whether they are on in vacant rooms] and sinks for leaks,” Ricaurte says.

“You’d be surprised at all the things you find, and the savings add up.”

Advances in data make it easier to track all facets of energy use, waste, and productivity, providing management with clearer paths to savings and sustainability. Greenview has quickly grown from startup to an industry powerhouse that continues to expand its range of studies and reports: the latest Green Lodging Trends Report 2018 has more than 100 pages.

Greenview also supports initiatives like Hotel Owners for Tomorrow, which brings together hotel and resort owners around the globe, sharing data and strategies with a goal to commit to five basic actions— incorporate sustainability from the beginning of investment decisions; evaluate one renewable energy project and one efficiency project per property per year; routinely monitor and benchmark sustainability performance; support brand efforts; and share best practices.

A summit was held in September in Phuket, a southern Thai resort island where hotel owners have been working to form a unified body to promote tourism.

In addition to addressing that topic, the 500 people in attendance, including 200 from Phuket, brainstormed opportunities to work together in such areas as beach cleanup, recycling, and nature conservation. Members of the Phuket Hotels Association signed the “Phuket Pledge,” a commitment to reduce, reuse, and recycle

certain way that people should be worried about, but more the cost of not building a certain way—and not just for environmental reasons, but because of the very real and tangible ways that climate change will devalue their property.”

—AMBER MARIE BEARD, PROJEKT HABITAT and its cost, thereby providing chefs with detailed analytics that help them efficiently manage supplies and ordering, and also drive change in their operations. Food waste costs the hospitality industry over $100 billion annually.

Critics, however, say this is all a drop in the bucket for a planet that could soon face food shortages and catastrophic consequences of climate change. “Developers need to think about where they build,” says Amber Marie Beard, who has worked on various sides of the sustainability effort—not only in tourism, but also on the real estate and development side.

After stints in Hong Kong and Bangkok,

Hospitality facilities in Asia are turning increasingly to software and artificial intelligence–based solutions such as one by U.K.-based Winnow to reduce kitchen waste.

A S I A PAC I F I C 2 0 1 9

BFeature_Gluckman_Asia19 (Conflicted copy from ULI-0396 on 2019-05-07).indd 49

U R B A N LA N D

49

5/9/19 2:46 PM

Cardamom tented camp is an eco-tourism lodge in the Botum Sakor National Park, Cambodia. A percentage of camp revenues goes back to conservation efforts in the park and other environmental initiatives.

50

U R B A N LA N D

efficiency, and local economic development are built into our business model to ensure a holistic approach when we master plan our tourism estates,” he says.

In the site resilience phase, potential impacts are weighed for existing ecosystems such as mangroves, wetlands, and waterways. Trees and plants are documented, and as many native species as possible are preserved in their normal habitat. Ayala mandates that its landscaping use at least 60 percent native foliage, Bengzon notes. An on-site nursery has helped boost that to 90 percent at Lio, an Ayala resort on Palawan, he adds.

In addition to its resilience initiatives, El Nido has embraced a range of measures aimed at operating the complex in a sustainable manner. Among other measures, these include use of solar panels and

S I X S E N S E S H O T E L S R E S O R T S S PA S

Beard advocates comprehensive sustainability planning from the start. She brushes aside worries about the cost of going green.

“In my opinion, it’s not the cost of developing a certain way that people should be worried about, but more the cost of not building a certain way—and not just for environmental reasons, but because of the very real and tangible ways that climate change will devalue their property.”

One developer already on board is Ayala Land, the big Philippines company that has shown a knack for sensitive small-scale resorts like El Nido on Palawan Island. Augusto Bengzon, Ayala chief financial officer and treasurer, says environmental concerns and sustainability guide all planning. The company focuses on four areas. “Site resiliency, pedestrian mobility and transit connectivity, eco-

CARDOMOM TENTED CAMP CO

she is now founder and director of projekt hABitat, a U.S. consultancy that works with tourism, real estate, and wellness firms to plan for better efficiency and more sustainable operations.

Resorts have long been criticized for jumping on the ecological bandwagon and seeking recognition without making many real changes. In the early days of the sustainability movement, hotels in Phnom Penh and Shanghai were the first in Asia to boast carbon-free status, but did so by funding projects in Cambodia and China and receiving carbon credits in return. The industry remains rife with properties that claim environmental achievements like moving to bamboo straws without considering why they use straws at all, let alone the impact of the two plastic water bottles they place in every hotel room every day.

A S I A PAC I F I C 2 0 1 9

BFeature_Gluckman_Asia19 (Conflicted copy from ULI-0396 on 2019-05-07).indd 50

5/9/19 2:46 PM

The Built Environment “Closing beaches that have been overused wouldn’t need to happen today if yesterday there had been proper planning and execution of sustainable policies, plus enforcement of

CARDOMOM TENTED CAMP CO

S I X S E N S E S H O T E L S R E S O R T S S PA S

existing laws relating to waste management.”

Six Senses resort, Yao Noi, Thailand.

a desalination plant; an on-site sewage treatment facility, used in combination with native reed bed filters, recycles the resort’s sewage and graywater for use in toilets and for watering plants. A dedicated recycling programme, meanwhile, segregates types of solid waste, with plastics dispatched off site to be converted into plastic bricks that can be used for construction.

Small-scale innovation facilities like this show some of the enormous potential of scaling up to include big developers in the sustainability crusade. But this should not diminish the efforts of individual innovation and achievement. For Cardamom Tented Camp in southern Cambodia, for instance, a trio of partners joined to create an eco-lodge that offers unparalleled nature experiences in some of the last remaining rainforest in the region, and they use tourism to finance conservation of the area.

Wildlife Alliance, a conservation group in Cambodia, leased more than 18,000 hectares (45,000 acres) of jungle a decade ago, forming a private reserve in a region rife with logging and wildlife poaching.

Wildlife Alliance rangers carry out more than 3,500 patrols each year, seizing thousands of illegal traps. Funding for the patrols now comes from a camp of nine tents in one of the most quiet and pristine parts of Cambodia. YAANA Ventures, which includes Southeast Asia’s Khiri Travel, partnered with Thai hotel company Minor Group to finance and run the remote lodge. Visitors enjoy “glamping” (glamourous camping) in the wilderness and joining nature walks with the rangers.

Willem Niemeijer cofounded Khiri Travel more than 25 years ago and has steered the company to greater involvement in community development. The company experimented with camps in other locations, with the dual goals of providing accommodation for guests in less-accessible parts of Cambodia and Thailand, and providing livelihoods for people living in poor areas. Khiri has also been a pioneer in its own eco-operation by being an early adopter of green certification, then striving to ensure that the company’s partners follow the same sustainability ethos.

“This is a humongous task for Asia, but there are lots of good examples out there,”

—RANDY DURBAND, GLOBAL SUSTAINABLE TOURISM COUNCIL

says Niemeijer. “A lot of it is just about awareness raising.” The Cardamom Tented Camp is not only praised by guests, but also has been recognized within the industry. This April, the camp was chosen as a finalist at the World Travel and Tourism Council’s Tourism for Tomorrow Awards in the Changemakers Award category.

Already, evidence exists of positive scale-up and synergy. Late last year, Shinta Mani Wild opened its own luxury camp in the vicinity of Cardamon Tented Camp.

Designed by renowned hotel architect Bill Bensley, who is responsible for many luxury camps across the region, the camp is on many of the world’s “best of” lists. Equally important, Shinta Mani Wild helps protect more than 17,800 hectares (44,000 acres) of wilderness in partnership with Cardamom Tented Camp, including a vital park corridor used by wild elephants. As they say, from small acorns, big trees grow. UL R O N G L U C K M A N is an American journalist who has been working in Asia since 1991, writing for Forbes, Time, Newsweek, the New York Times, the Wall Street Journal, and other publications.

A S I A PAC I F I C 2 0 1 9

BFeature_Gluckman_Asia19 (Conflicted copy from ULI-0396 on 2019-05-07).indd 51

U R B A N LA N D

51

5/9/19 2:46 PM

ADVERTISE IN

PREMIER TECHNOLOGY IN REAL ESTATE ISSUE Showcase your organization as a leader in the creation & implementation of innovative software platforms, building cyber security systems, 3D printed houses, smart roads & bricks, pollution fighting buildings, smart building technologies, etc.

Early Bird Discounts available through August 9th. Ad materials due by September 6th.

Corporate profile packages and single rates available!

urbanland.uli.org/advertise I 202.753.4777 I mary.sumner@uli.org

BFeature_Gluckman_Asia19 (Conflicted copy from ULI-0396 on 2019-05-07).indd 52

5/9/19 2:46 PM

U L I ASIA PAC IF IC C HAI RMAN NI CHOLAS BROOKE

UL Interview Reflections on a storied, globe-spanning career—and thoughts on today’s Hong Kong.

C O L I N G A L LOWAY

ULI Asia Pacific Chairman and Global Trustee Nicholas Brooke is chairman of Hong Kong–based real estate consultancy Professional Property Services Group. His 50-plus-year career in real estate has also seen him juggle a host of roles in both the public sector and the private sector. Apart from an ongoing position as principal adviser to the APEC Business Advisory Council, he has served as chairman of the Hong Kong Harbourfront Commission and Hong Kong Science and Technology Parks, as well as president of the Royal Institution of Chartered Surveyors. Before arriving in Hong Kong some 40 years ago, he worked in the Middle East as an adviser to the ruling families of Dubai, Bahrain, and Abu Dhabi, where he helped set up the Abu Dhabi Investment Authority (ADIA), today one of the world’s biggest sovereign wealth funds.

Senior executives in almost any field tend to follow a fairly well-trodden career path, but your background is less conventional. How did you get to where you are today?

I was actually brought up in Brazil.

My father worked there for ICI, so my first 14 years were spent in Sao Paulo, where I went to school and was taught in Portuguese. Then we moved back to Yorkshire in the U.K., and I became heavily involved with the local estate, helping them manage their affairs, so I decided to pursue agriculture. I became a land

agent, and the first three to four years of my career I spent managing farms and estates for the crown and church. From there, I moved over to the urban side and started to get involved in development and valuations of urban property.

Soon after that, the company I was working for had this big event and called me down to the head office in London.

And as I walked into reception, there stood this gentleman, six feet three inches [1.9 m] tall in a flowing white gown and a beard—obviously an Arab.

This was in the late ’60s. It was early days, and Arabs hadn’t been seen in

London in any numbers. But as you do when you’re a keen young man, I asked: “Sir, can I help you?” And it turned out he was one of the sons of the ruler of Dubai. It was just at the time the oil money was starting to flow, so in fact he’d been sent off by his father to start spending some of that money. What he really wanted was to buy a house in London. So I helped him buy his house, and after that he just carried on; we bought him hotels, office buildings, and so on.

Now, this was in the days of cash, and of course at the time the Middle East had no track record in the United

A S I A PAC I F I C 2 0 1 9

Interview_Asia19 USE(Conflicted copy from Elizabeth’s iMac on 2019-05-06).indd 53

U R B A N LA N D

53

5/7/19 11:28 AM

Kingdom, so no one was going to deal with them unless they were going to do a cash purchase. This meant U.S. dollar cash, literally, in a suitcase—which is how I learned that a large suitcase will carry US$22 million in $100 bills!

After about six weeks, the father heard about what his son was up to. He summoned him back home but said: “By the way, you’d better bring young Brooke with you.” So I headed off to Dubai, where we spent three very happy years working with the ruling family, helping them invest within the Emirate and internationally. Then after a few years, the ruler of Bahrain asked if he could borrow me. So we moved to Bahrain for a year, doing exactly the same thing. Then came Abu Dhabi, where I spent another three years. Of course, that was a fairly serious time—more oil was flowing, and obviously it’s fine having people like me investing [the proceeds], but essentially you needed an institution. So, we were involved in setting up the Abu Dhabi Investment Authority, which is now one of the major sovereign players.

And eventually you moved to Hong Kong?

So that takes us through to the late 1970s, when I was approached by the Swire Group to come to Hong Kong. The economy had moved on and most of their waterfront properties—a dry dock at Tai Koo, a sugar refinery, lots of warehouses—had become redundant. They realised, though, that these were potentially very valuable, so part of my role was to develop a master plan for these properties. The big challenge was that we came up with a way to build 63 towers accommodating 50,000 people, but at the same time—and quite rightly—the city was focused on jobs, because there’s no way you can create a community with that number of people without also creating local employment. So, in addition to Tai Koo Shing came the Tai Koo industrial estate, which provided 10,000 or so jobs, and is now where all the new office buildings are being built. And soon after that, the MTR [Mass Transit Railway] came into play. We

54

U R B A N LA N D

were looking initially at a self-contained solution, but when these places became connected to Central, it had a major impact.

We started selling Tai Koo at HK$150 per foot, but when I left we were selling it at about HK$4,500 to HK$5,000—about 50 times the original price. And now it’s about HK$15,000 to HK$20,000.

From left: Former ULI Pacific chairmen N.H. Seek and C.Y. Leung and current Chairman Nicholas Brooke.

Ultimately, you decided to start your own business. What did that involve?

We started with a Hong Kong focus because that was where my experience lay. But the clients we worked for very soon wanted to get involved around the region, or were already involved, so we had to respond to that, and we did it in two ways: first, by forming alliances in different markets, and internationally. One model we used was hub-and-spoke, with alliances and relationships. And the other—because in many of the emerging markets there was just a lack of partners or expertise—we set up our own offices. At one stage, we were around 17 offices and maybe 1,400 to 1,500 people.

We found good local partners, but we brought in the expertise, the best practice, and very often we brought the investment.

Who are your clients?

Larger families. Much of our work is for families and always has been. A number of corporates as well, and we also do advisory work for the Hong Kong and other governments. But the investment and very often the development we do are mainly via joint ventures with local families’ private wealth.

They are very active around the region and have grown a lot over the last 10 years, partly because they’ve built up more wealth as families, but also because their allocation to real estate has increased. Before, it might have been 5 to 10 per cent. Now, it can be as much as 15, 20, or 25 per cent.

Is there a reason for that?

I think within family portfolios they are always looking for an element of anchor, of certainty, and a refuge. So real estate is seen as ticking all those boxes. And it’s also seen today as more about value conservation rather than value creation. So there’s a

very clear drive to preserve wealth as well as create it, and real estate is seen as a means of wealth preservation.

Is it fair to say generally that this type of money is more willing to accept risk than conventional investment funds?

Yes, and of course you’re moving down the generation ladder now, so we’re into the third and fourth generation, looking at people being educated offshore, with a very different perspective on life, people who have worked offshore and returned home wearing very different spectacles.

How has that generational shift affected investment patterns?

I think it’s changed them in a number of ways. First, there is more willingness to consider nontraditional forms of investment, such as the services side of real estate, and on the proptech side, but also there are a number of families now heavily invested in health care, in wellness, the soft side if you like, things like healthy ageing. So looking at how they can add to the value of their real estate through a strong service group, soft provision as well as hard provision. Then I think there’s also a willingness to look at emerging markets and frontier markets. And this is largely through a wish to learn. It’s very interesting. In our ULI research, we’ve talked about funds and about how there’s been a distinct push back in allowing other people to manage assets. In the past, they would have just invested, very traditionally,

A S I A PAC I F I C 2 0 1 9

Interview_Asia19 USE(Conflicted copy from Elizabeth’s iMac on 2019-05-06).indd 54

5/7/19 11:28 AM

in two or three markets around the region that were mature. Now, they increasingly want to deal direct, and many of the younger people are investing in this way as a means of learning and understanding markets.

And that fits with your mentality, too?

Yes. Obviously, risk and reward go hand in hand, but this also probably feeds into ULI— it’s an interest in shaping and influencing outcomes. Many of our younger investors have the same attitude. They want to play a part in shaping the outcome of a particular project or initiative and indirectly contributing to the future of that city and country.

You are known in Hong Kong for your longstanding commitment to socially driven work, in general helping sustain the community. How did that start?

Initially when working at Tai Koo Shing, one needed to develop a detailed understanding of the housing market in Hong Kong and its driving forces. And as a result, I was asked to join the Housing Authority and eventually became vice chairman. In those days, the Housing Authority was looking at different housing models and especially at ways to address the challenge of many families who were living in substandard housing, particularly those living in squatter huts on hillsides, and so there was a big issue in terms of rehousing and what the model should be.

The way we looked at it was by dividing the market into those who couldn’t help themselves, which was your public rental, and those who could help themselves if they had some financial assistance. So that saw the emergence of the Home Ownership Scheme [HOS]—they could get on the ladder if they were given some financial help, which we provided by discounting the price down to 70 per cent of market [rate]. So we came up to these two models and began building units that corresponded to that matrix.

Hong Kong has a pretty acute shortage of housing, and there are lots of proposals for dealing with that. How would you address the situation?

The first thing is that we need to be much more proactive in moving things forward. I

THROUGH OWNERSHIP, NOT

Territories on farmland. My understanding is that they are willing to come to some understanding. Within their mix, they will provide an element of affordable housing, an element of elderly housing, and housing for singles. There’s a way to come up with a very interesting mix of units in the New Territories, which would respond to many of the challenges.

THROUGH RENTAL.”

What is stopping that from happening now?

—Nicholas Brooke

A lack of brave decisions and leadership.

Because housing is a public purpose. So you can resume [the land]. Carrie Lam [the chief executive of Hong Kong] has got to wave the stick a bit more seriously and maybe she has to resume the odd site to show she’s serious. The other thing we need to do is to develop a private rental sector in Hong Kong in a structured way. We have this approach in Hong Kong where people expect to buy as soon as they’re out of university or even before. You and I rented for five, 10 years, or longer, and that should be the norm. So the government should sell land subject to restrictions in terms of it being built for rental. And we can have some income bands and we can focus on people who need help. Then the developers can sell that stock as an investment to an institution once it’s built.

“I’M AN OWNERSHIP MAN, AND I BELIEVE WE SHOULD ANCHOR HONG KONG

think you can hide behind land supply and say we can’t do anything until we have the land. But there are lots of things we can do in the interim. I think where I disagree with current policy is on the proposal to increase the supply of public housing to 70 per cent of the total. I’m an ownership man, and I believe we should anchor Hong Kong through ownership, not through rental.

Public rental just increases the burden on society. We have 850,000 public housing units today, and replacing—and just maintaining—those units is a huge burden on society. No one has really thought about that as a long-term challenge. So, I would ring-fence the 850,000 and say that’s it, we’re going to work within that stock, and I’d be very tough on those who need to be moved on because of their personal wealth and all the rest. So, I’d move people out and I’d move new people in, but I would do it within that existing stock of 850,000. For the new stock that we build, a 70/30 split is fine, but I think that 70 per cent should be subsidised purchase and then 30 per cent should be market purchase. Whereas the current model is 70 per cent public rental, which I think is just increasing the burden on society, we’re helping people who don’t really need public rental help. They need the subsidised-purchase help. We should be moving more aggressively to an ownership model. We’re building 50,000 units per year now; I think all that should be privateownership related.

The other thing is that we need to do this deal with the developers in the New

Does that create a problem with yields given that rents in Hong Kong are so low relative to the value of the property?

Well, the government needs to price the land in an appropriate manner that would allow an acceptable yield. And to the extent that people need help, you can have a voucher system. The Hong Kong chief executive is a voucher person and believes that you don’t just give a blanket level of assistance to everyone, you do it on a personal wants/needs basis. So, if you need a top-up to pay the rent then you get that, assessed on your income, etc. So different people would get different levels of assistance through vouchers as well. UL CO LIN GALLOWAY

A S I A PAC I F I C 2 0 1 9

Interview_Asia19 USE(Conflicted copy from Elizabeth’s iMac on 2019-05-06).indd 55

is ULI Asia Pacific vice president

for content.

U R B A N LA N D

55

5/7/19 11:28 AM

proactive

case study

KENNETH RHEE

Jeonju Hanok Village: South Korea’s Heritage Showcase

KENNETH RHEE

KENNETH RHEE

Public and private investment reclaimed the area’s cultural heritage. Increased tourism now challenges its authenticity.

56

Construction in Jeonju Hanok Village in the Korean city of Jeonju, located about 200 kilometres (124 mi) south of Seoul, began around 1910. After the village began growing in affluence during the 1930s, it became known for its abundance of courtyard hanoks (tile-roofed houses also known as giwa-jibs)—a home type involving significantly more expensive

Giwa-jibs, tile-roofed houses, are prominent in Jeonju Hanok Village.

construction methods than were normal at the time, when houses usually had roofs consisting of rice straw coverings.

To protect this architectural heritage, authorities designated the neighbourhood a historic preservation area in 1978. But with authorities having little understanding of how to manage such an asset in the context of a thriving residential community, the designation served only to trigger a prolonged period of decline that lasted nearly three decades.

Because homeowners were prohibited from demolishing or significantly altering the appearance of their homes, they had little incentive to maintain or restore them. As a result, the once-wealthy enclave was gradually eclipsed by newer, more modern communities boasting conveniences such as indoor kitchens and toilets, together with

Jeonju Hanok Village is located in Jeonju, a city with a population of 650,000. A well-known example of preservation of traditional Korean houses known as hanoks, the area has more than 600 of the structures, many dedicated to cultural pursuits.

U R B A N LA N D

Casestudy_Asia19.indd 56

newfangled appliances including heating and air conditioning. Established residents voted with their feet and were gradually replaced by artists and artisans, for whom the area’s ambience and low rents held potent appeal.

Real regeneration of the neighbourhood started in earnest during the late 1990s, led by the city government. Aiming to leverage the neighbourhood’s iconic status as a means of landing the city a coveted nomination to host matches for the 2002 FIFA World Cup, local authorities launched an ambitious plan to revitalise the Hanok Village area.

This quickly put a stop to a spate of uncontrolled redevelopment that had begun in 1996, after the city government lifted many conservation-driven regulations in response to homeowner complaints.

By this time, authorities were aware that a heritage preservation policy based on telling residents what not to do with their homes was doomed to fail.

They therefore adopted a more proactive approach via a range of government-led initiatives. The city purchased old homes from those willing to sell and restored them in the traditional style. And the city provided subsidies to homeowners to finance renovations or build new hanok-style homes.

Government policies were not targeted only at preserving and converting hanok residences. New traditional-style structures were created to provide museums and civic facilities; also, old streets were repaired and new ones built to improve access and appearance. Finally, as renovation work proceeded, officials recognised that while the city had a wide range of historic and cultural heritage elements such as paper

A S I A PAC I F I C 2 0 1 9

5/7/19 11:23 AM

Restoration Investment Between 2000 and 2017, some KRW 148.9 billion (US$130 million) in public funding was invested, of which 29 per cent came from the national government and the remainder from city and provincial governments.

The key components of the government investment were as follows: l Traditional culture, street landscape, and infrastructure improvement: KRW 68 billion (US$60 million)—46 per cent of the total. l Public cultural facilities construction: KRW 49 billion (US$43 million)—33 per cent. l Subsidies for privately owned hanok repairs and construction: KRW 11 billion (US$9.6 million)— 7 per cent. l Subsidies for the operation of cultural facilities: KRW 20 billion (US$1.8 million)—13 per cent. l Planning: KRW 600 million (US$525,000)—0.4 per cent.

Initial work carried out from 2000 to 2002 involved a focus on the most pressing issues, including the following: l Improving the main street, Taejo Road, which runs east–west through the middle of Hanok Village; l Building key cultural facilities such as museums for traditional culture and arts; and l Providing subsidies for repairs and new construction of hanok homes.

In subsequent years, the government continued to invest heavily in improvements to other streets, namely the north–south Eunhaeng Road, and also to build more museums and exhibition centres.

From 2002, the government began providing financial support to

individual hanok homeowners, with grants of up to KRW 50 million for repairs and up to KRW 100 million for new hanok construction. Financial subsidies from the city government to owners of hanoks further enhanced the uniformity of the architectural style. At the same time, all new building and repair work was subject to review by the local Hanok Review Committee, composed of representatives from the government and Hanok experts, to ensure that restoration conformed with guidelines for style and quality.

Jeonju’s History An ancient city that was the capital of a kingdom for 50 years in the ninth century and a key regional government centre for over a millennium, Jeonju is the capital of the North Jeolla Province in the southwestern region of South Korea.

With a population of about 650,000, Jeonju is the 16th-largest city in the country and the economic and educational centre of the province, which has a population of 1.9 million and a land area exceeding 8,000 square kilometres (3,000 sq mi). In Korea, Jeonju is well known for its traditional cuisine (especially bibim-bap, a popular dish made with rice mixed with vegetables and meat), music, and handicrafts that leverage the local paper-making tradition.

Compared with Seoul and other more industrialised cities, Jeonju has a more genteel pace of life, much like the main river Jeonju-chun, which meanders along the southern boundary of Jeonju Hanok Village and then forms the western boundary of the city’s old downtown.

Successes Ironically, the recession that followed the Asian Financial Crisis in 1997 provided a boost for Jeonju’s hanok regeneration campaign because unemployment and bankruptcies drove a large number of cut-price homes to market. These properties were used to build or locate many of the community’s planned cultural facilities, all built in the traditional hanok style. The

approaching opening of the FIFA World Cup in 2002 also provided a strong incentive to the government to accelerate regeneration efforts.

Today, Hanok Village is the city’s most popular area for tourists, who use it as a base for travelling within the province and sometimes across southwest Korea. In addition to a large cluster of well-preserved traditional homes and streetscapes,

the village offers various ways to experience traditional Korean culture.

Museums and exhibition centres provide opportunities to experience increasingly forgotten crafts like traditional paper making and wine making. And the area has evolved as a centre for the study of a variety of traditional pursuits ranging from Confucian philosophy to traditional Korean folk music to home cooking

The 30-hectare (75 acre) village draws more than 11 million visitors a year.

JEONJU POLICY RESEARCH INSTITUTE

making and cuisine, it lacked space to exhibit and cultivate the many other elements of its heritage, such as opera and crafts. The government created new facilities, such as exhibition places for kimchi, wine, opera, and literature, to cater to this aspect of the neighbourhood’s history.

A S I A PAC I F I C 2 0 1 9

Casestudy_Asia19.indd 57

U R B A N LA N D

57

5/7/19 11:23 AM

Go v er nmen t ex pen di t ur e (2 0 0 0 -2 0 17 )

proactive

GOVERNMENT EXPENDITURES (2000–2017) Year

'00 '01

'02 '03 '04 '05 '06 '07 '08 '09 '10

'11

'12

'13

'14

'15

'16

Total (KRW bn)

'17

Planning

0.6

Street improvement, landscape, and infrastructure

68.3

- Taejo Road

8.0

- Tourism Road

5.1

- Eunhaeng Road

13.0

- Parking lots

13.8

- Cultural landscape

15.6

- Jeonju Creek access road

6.6

Public cultural facilities

48.6

- Traditional Culture Center

14.7

- Traditional Crafts Exhibition Center

3.0

- Traditional Wine Museum

1.9

- Hanok Life Experiment Center

2.1

- Traditional outdoor market

1.2

- Jeonju Famous Artifacts Center

1.9

- Craft workshop

1.3

- Choi Myunghee Literature Center

1.7

- Traditional Hanok (Donghun)

4.8

- Ejin Museum

4.6

- Three Big Museum

4.1

- Confucius Culture Center

2.3

- Tourist Information Center

1.0

- Purchase of privately owned homes

6.5

- Subsidies for repairs

4.9

Support for operation of cultural facilities

20.0

Total (national government: 42.0 billion; local governments: 106.8 billion)

148.9

58

U R B A N LA N D

Casestudy_Asia19.indd 58

Hanok Village area. Less obvious but also essential for the village’s long-term success has been active participation from various civic groups interested in preserving and promoting various elements of the area’s cultural heritage such

as architecture, traditional opera, ceramics, paper making, calligraphy, literature, and cuisine.

Hanok Village is further enriched by businesses that organise events such as traditional opera performances, offer training programs

on how to make traditional paper or brew rice wine, or serve Korean dishes in locally made earthenware.

Challenges As is often the case, the very success of Hanok Village has imperilled its

A S I A PAC I F I C 2 0 1 9

5/7/19 11:23 AM

KENNETH RHEE

using local produce. On a typical day, several large or small cultural and musical events are also offered.

The daily operation of the area is handled by a department within the city’s tourism bureau whose work is focused exclusively on the

KENNETH RHEE

11.3

Privately owned hanoks

KENNETH RHEE

authenticity as an influx of tourists threatens to dilute the area’s uniqueness and cultural value. Commercialisation and gentrification are parallel threats. What was once primarily a residential neighbourhood today draws an annual tourist flow that has risen from 1 million in 2006 to over 11 million in 2017.

The following are among the threats: l Declining residential population.

Rising home prices and increasing commercialisation have prompted many residents to relocate. As of the end of 2017, the number of households stood at 613, a drop of about 5 per cent from the previous year and a 42 per cent decline since 2008. Artists and craftspeople also have started leaving the area for nearby neighbourhoods such as Seohak-dong, taking

advantage of lower housing costs and a more relaxed environment. l Over-commercialisation and dilution of cultural authenticity.

Increasing numbers of tourists and tourism-driven business activities have significantly changed the types of businesses operating in the area.

In the early years, restaurants and tea houses served traditional local cuisine and drinks. Today, new outlets typically serve fast food (not necessarily of traditional Korean origin) and rent motorised bikes to tourists.

Also, just outside Hanok Village, a number of recently constructed highrise buildings (generally four to six storeys) in Western architectural style dwarf adjacent, mostly single-storey hanoks. These buildings primarily cater to tourists and are generally used for retail, entertainment, and food and beverage purposes—offer-

A typical homestay popular with foreigners.

A pavilion on the bridge over Jeoju-chun connects Hanok Village and Seohak-dong.

KENNETH RHEE

s

The area has evolved as a centre for the study of traditional pursuits ranging from Confucian philosophy to traditional Korean folk music to homegrown cooking.

Hanok Architecture A hanok, a traditional Korean house type, has a structure supported by wooden columns standing on large stones half-buried in the ground. It features a roof that uses tiles with a wavy shape, called giwas, also stacked in columns. Walls are made of commonly available clay that is impermeable to moisture but allows air to permeate. Inside the house, the floor is warmed by heat, created by a cooking stove, that flows through ducts constructed by stacking large flat stones under the floor.

The hanok takes the shape of a straight or inverted L, faces south with a courtyard in front, and is surrounded by an earthen fence.

Before Korea’s urbanisation, which started in the 1960s, hanoks, also known as giwa-jibs (tile-roofed houses), were built for high- and upper-middle-class families, whereas the majority of people lived in homes with rice straw roofs that required periodic replacement.

Because of the relative scarcity and the high costs of labour and materials, a hanok is significantly more expensive to build than a modern home, which is typically constructed from concrete. In recent years, however, hanoks have been gaining popularity due to their character and heritage appeal.

ings incongruent with the more placid lifestyle of Hanok Village. l Inauthentic hanok homes. With hanok homes increasingly being used by businesses, new homebuilding and renovations—even if done in the hanok style—are adhering less and less to traditional styles and materials. For example, instead of using clay tiles for the roof—a key part of hanok identity—metal sheets mimicking clay roof tiles are often used now.

Also, to increase visibility and attract passing tourists, business owners have significantly lowered fences and used nontraditional materials.

The success of Jeonju Hanok Village is a result of a variety of factors: l Many residents continued to value traditional Korean architectural style even during the depths of the Japanese occupation during the first half of the 20th century. This was the case despite a proliferation of increasingly common Japanese and Western architectural styles. l Local authorities managed to protect the neighbourhood from the threat of demolition to make room for high-rise apartments and commercial buildings during the city’s rapid urbanisation that began in the late 1970s.

l Motivated by a major sporting event, local government and civic leaders were able to recognise the potential of the area and to preserve and showcase its cultural heritage. It helped that some leaders were themselves practitioners of traditional arts such as calligraphy and poetry, and they appreciated traditional Korean architecture. l There was a concerted effort on the national, provincial, and city levels, as well as by civic groups, to improve both tangible and intangible aspects of the area.

As noted, Jeonju’s challenges today flow largely from its recent successes, which are probably good problems to have. In particular, however, experience suggests that focusing on common measures of achievement such as visitor numbers and tourist spending is a mistake that can lead to the dilution of authenticity. Ongoing vigilance is therefore key. In the long run, Jeonju’s preservation as a centre for Korean cultural heritage is likely to depend on the commitment of local officials to deal effectively with the impacts of gentrification and commercialisation. UL K E N N E T H R H E E is executive director of ULI in

Mainland China.

A S I A PAC I F I C 2 0 1 9

Casestudy_Asia19.indd 59

U R B A N LA N D

59

5/7/19 11:36 AM

Prospects for Japan’s Capital and Real Estate Markets KENNETH FRIDLEY

Economic headwinds are growing as the 2020 Summer Olympics draw near.

As we move forward to the muchanticipated 2020 Tokyo Olympics, it is time for a reality check in Japanese real estate markets. Asset prices in Japan have risen strongly in recent years, fueled by influences including cheap and abundant capital, positive yield spreads, slow but steady economic growth, and a resurgent tourism sector that has proved to be a boon for local retailers. And, not least, positive sentiment around the 2020 Summer Olympics has been a factor, with many investors believing the market will remain buoyant until after the Games are finished.

Recently, however, perceptions have shifted, with a growing body of opinion gravitating towards the view that a correction may occur well before summer 2020.

Whilst there is not necessarily a singular event that will cause this to happen, I see several factors that are likely to weigh on the market beginning this year.

Central Bank Policy Perhaps the biggest concern centres on the economy. Unsurprisingly, the Bank of Japan (BOJ) announced early this year that it would extend its policies of qualitative and quantitative easing (QE) (including negative interest rates of –0.1 per cent for short-term debt and 0 per cent for 10-year Japanese government bonds [JGBs]). In addition, the BOJ increased the government’s Asset Purchase Program to an annual 6 trillion yen per year for exchange-traded funds (ETFs) and 90 billion yen for Japan real estate investment trust (J-REIT) shares. Nationalisation of Japan’s public equity markets therefore continues unabated.

But while the BOJ has maintained gross domestic product (GDP) growth forecasts at 2 per cent per year, ongoing economic expansion will clearly be challenging in light of a number of converging themes: global economic uncertainties, the ongoing

SETSUKON

The 2020 Olympic Village in Tokyo is under construction.

60

U R B A N LA N D

LandWrites_Asia19.indd 60

A S I A PAC I F I C 2 0 1 9

5/8/19 1:03 PM

trade war between the United States and China (Japan’s two largest trading partners), volatile public equity markets, and a strengthening yen. Add to this the upcoming increase in the consumption tax from 8 per cent to 10 per cent, which will be effective starting October 1, and it becomes clear that the headwinds facing Japan’s recently positive economic performance are growing.

What’s more, after a prolonged period of QE, the government is running out of arrows in its economic quiver. With few alternatives other than to increase purchases of JGBs as the BOJ did most recently at the beginning of 2019, growth targets are likely to be revised downward to a range of 1.0 per cent to 1.4 per cent around the middle of the year. Indeed, some economists have suggested that Japan may slide into a recession during the fiscal year that started April 1.

SETSUKON

Record Bank Lending One major driver of rising asset prices in Japan has been an abundance of low-cost debt. Outstanding real estate financing from domestic banks reached 78.94 trillion yen (US$712 billion) at the end of 2018, the highest figure on record and the fourth consecutive annual increase, according to BOJ data.

But while ultra-low interest rates may be beneficial for investors, the impact on bank profits has been negative, and has driven some to adopt riskier lending strategies. The recent trend of regional banks becoming active as direct lenders for assets located in Tokyo, in direct competition with Japan’s megabanks, is one example of this; before, regional banks

would only participate in a syndication led by one of the major institutions.

Concerns over heightened risk have led many Japanese lenders to adopt slightly more conservative views on new loans, lowering loan-to-value ratios and slightly increasing spreads. Residential loans, in particular, have been affected by tighter underwriting standards following the recent Suruga Bank scandal, in which appraised values were artificially increased by the bank. Investors should therefore anticipate a tightened lending market for real estate assets in 2019 and into 2020.

Currency and Trade Wars For several years, a weaker yen has been a boon to Japanese exports and the economy generally. But the recent shift in U.S. monetary policy has generated greater uncertainty over the yen/dollar exchange rate, and the signs going forward appear ominous, with U.S. trade representatives recently indicating they intend to push for a provision limiting Japan’s ability to devalue the yen.

In addition, Washington is pushing for Japan to open up its agricultural markets and to limit its auto exports to the United States. Indeed, a trade war may be looming in the near term, as the White House pushes for punitive tariffs on Japanese car makers—a prospect I see as one of the larger threats to the Japanese economy.

Declining Consumer Consumption Another problem relates to declining consumer spending. Long a pillar of economic growth, private consumption accounts for roughly half of Japan’s economy. With consumer confidence dipping, however, that pillar may also be at risk.

One reason for this is an upcoming increase to the consumption tax, which is set to rise to 10 per cent from the current 8 per cent in October. Although the government is planning an 18 billion–yen stimulus package to offset its impact, the programme appears to be more a public relations campaign than anything else, featuring enticements like gift cards and 5 per cent cash-back programs. The impact on domestic consumption is likely to be significant.

Tourism The first word that comes to mind regarding tourism in Japan is: finally! Finally, Japan has come to realise that culturally, it is a true tourist destination that has long been overlooked. In recent years, tourism has become increasingly important to the economy—more than 31 million visitors arrived in 2018, and the total is projected to rise to 40 million in 2019.

At the same time, however, tourism is something of a double-edged sword.

From a social perspective, it can create lifestyle changes for people who reside in heavily visited tourist areas such as Kyoto.

Economically, too, tourism revenue tends to be unstable since global economic and political issues can cause abrupt decreases in visitor numbers and associated spending. Indeed, 2018 saw a significant decline in Japanese per-capita tourist consumption—particularly among Chinese visitors—as a result of a stronger yen. The fact that some 74 per cent of visitors to Japan originate from Greater China and South Korea, both of which have ongoing disputes with the Japanese government, creates another significant risk to incoming tourist flows.

A S I A PAC I F I C 2 0 1 9

LandWrites_Asia19.indd 61

U R B A N LA N D

61

5/8/19 1:03 PM

landwrites Property Markets How will these issues affect real estate?

For now, the fundamentals in Tokyo remain strong, particularly in the office sector, where vacancies stood at less than 2 per cent at the end of 2018, with surprisingly quick uptake of new supply. In newly developed buildings, vacancies are a mere 3.5 per cent, down from a level of almost 30 per cent as recently as May 2017.

Expect the office market to remain tight, with moderate rent growth through 2020.

That said, a total of 1.2 million square metres (12.9 million sq ft) of new office space will be added in Tokyo in 2019 and 2020, increasing total stock by approximately 9 per cent. This may weigh on the market going forward. As for capital values, prices of new class A buildings in Tokyo are around 31.4 million yen per square metre, with net operating income (NOI) cap rates averaging around (or just below) 3.0 per cent, when available. Class B office buildings are trading between 3.5 per cent and 3.8 per cent in the five major wards, depending on age.

Residential Markets Driven primarily by foreign buyers as well as Japanese from outside the capital, prices of Tokyo’s for-sale residential condominiums (bunjyo) are reaching record levels. According to the Real Estate Economic Institute, the average price per square metre of condos in Tokyo’s 23 wards increased by 22 per cent during the course of 2019 to 1.198 million yen. With per-square-metre prices of new condominiums up 41.3 per cent since January 2015, increased values have effectively priced middle-class buyers out of the market in central Tokyo.

The multifamily market, meanwhile, has seen similar price increases and a corresponding decline in investment returns.

In fact, the multifamily sector has become the sector du jour for many foreign and domestic investors, increasing competition for assets and driving values up. Pricing per square metre varies by submarket, but two things are clear: pricing reflects a premium to replacement cost; and in some 62

U R B A N LA N D

LandWrites_Asia19.indd 62

Concerns over heightened risk have led many Japanese lenders to adopt slightly more conservative views on new loans, lowering loan-to-value ratios and slightly increasing spreads. markets, the price per square metre for rental assets exceeds the price per square metre of condos.

With NOI cap rates in most submarkets in Tokyo now between 3.0 per cent and 3.5 per cent, investors have little room to maneuver should occupancy and/or rental rates decline. Newer assets located in submarkets with strong demographics have recently seen significant rent growth (i.e., upwards of 5 per cent year-over-year), but this has been driven by strong demand and limited new supply rather than wage growth. Low yields also raise concerns if the Japanese economy contracts, as many economists have predicted. Given the overall dynamics of the multifamily market, I don’t think that investors need to be concerned about a dramatic drop in values or rents. They should, however, be wary of underwriting overly aggressive rent growth.

Logistics Market The logistics market continues to be an investor favourite, and rightfully so, given strong demand, good rent growth, and a supply pipeline that has kept pace with demand without creating oversupply. If you are an existing investor in the sector, prospects are good. If you are looking to gain exposure, however, it is not easy to find deals given that the major logistics developers now have such a strong foothold in the sector. As a result, investors are looking at ancillary logistics facilities such as self-storage, cold storage, and smaller,

single- or two-level projects that are often overlooked by larger players.

Retail Market The retail sector, particularly urban retail, has been reaping the gains of growing consumption by both domestic shoppers and tourists for several years. Suburban retail is the exception, as it struggles to fight off e-commerce players as well as competition from retail giant AEON, whose rapid expansion has created a very bifurcated market for suburban centres: i.e., those that contain AEON properties and those that do not. This phenomenon has been exacerbated by the advent of AEON’s J-REIT vehicle, which will acquire any mall doing well while also litigating to reduce rent in malls where they are a tenant. In broader terms, investor interest in retail continues to decline generally with the exception of urban high-street assets, which currently trade in the high–2 per cent/low–3 per cent cap rates when available. The aforementioned increased consumption tax will undoubtedly have a negative effect on the retail sector going forward, however.

Conclusion On the surface, the Japanese real estate market looks to be humming along nicely, buoyed by a long track record of generally good fundamentals, low-cost debt, and an abundance of both domestic and foreign investment capital. Scratch the surface, though, and you find several issues that are beginning to cause concern. Most of these on their own are unlikely to cause a reversal. Seen in their entirety, however, they suggest that a market correction is likely to occur soon—and quite possibly before the 2020 Olympic Games. That may be worrying for some, but for many investors it would be welcome news. UL is president of Capbridge Investors K.K., a real estate investment advisory firm based in Tokyo.

K EN N ETH F RID LEY

A S I A PAC I F I C 2 0 1 9

5/8/19 1:03 PM

CONNECT WITH THE WORLD OF REAL ESTATE

2019 ULI FALL MEETING SEPTEMBER 18–21

WASHINGTON, D.C.

Join more than 6,500 real estate leaders for the premier industry event

FALL.ULI.ORG

LandWrites_Asia19.indd 63

5/8/19 1:03 PM

backpage MARK COOPER

InterContinental Shanghai Wonderland

ATKINS

A luxury hotel in an abandoned quarry creates a splash.

M A R K C O O P E R is a freelance real estate journalist based in

Hong Kong.

64

U R B A N LA N D

Backpage_Asia19.indd 60

The InterContinental Shanghai Wonderland Hotel in China’s Songjiang District, some 40 kilometres (25 mi) from Shanghai, appears modest when approached from ground level because only two storeys project above ground and green roofs help them blend into the surrounding greenery. But when guests step inside the hotel—adapted from an abandoned quarry—they see the dramatic construction, attached to the rock like a hanging garden.

Approach from the air, on the other hand, and the mouth of the quarry and its lake are revealed as well as a further 14 floors of the hotel, clinging to the quarry wall. An additional two floors are below ground, with underwater guest rooms and a restaurant.

More than a decade in the planning and construction, the 386-room hotel was designed by British architects Atkins in partnership with Jade+QA on behalf of Shimao Property Group, a Chinese developer founded by Hui Wing Mau, one of the first people to develop a privately owned hotel in China.

Hui told a press conference at the opening of the hotel in November that he came up with the idea of building a hotel in a quarry in 2006; work started on the US$300 million project in 2009.

Known as the cradle of Shanghai, Songjiang has a history stretching back nearly 6,000 years and has been selected for tourism development. Along the district’s northern edge are the “Nine Mountains” thought to form the spine of a large green dragon. New developments in the area must demonstrate a strong commitment to environmental protection, regeneration, and preserving the landscape, hence the restrictions on above-ground construction.

The former stone quarry had been dug to nearly 100 metres (328 ft) and then abandoned to the elements; the slow accumulation of rainwater created a pool at the bottom of the pit. Eric Seymour, senior design director at Atkins, says, “The design was inspired by the Hanging Monastery of Hengshan Mountain, which was

constructed during the Wei period more than 1,400 years ago. It is conceived as a modern resort that draws heavily upon its Taoist roots offering a place of sanctuary from hectic city life.”

In Songjiang, engineers faced a number of challenges presented by the unique nature of the project. For example, when concrete was sent down into the quarry via standard construction chutes, the materials separated and were unusable. The team ended up patenting more than 41 engineering methods.

The hotel has a number of unique design features, including a “glass waterfall” that cascades from ground level down the side of the quarry wall, encasing the lifts and giving access to guest rooms. At night, the glass-encased elevators are illuminated to resemble water sparkling down to the pool’s surface. The glass “waterfall” mirrors the water falling down the opposite side of the quarry.

A floating bridge allows visitors to walk across the water’s surface looking skyward to appreciate the colossal scale of the natural cliff walls and the hotel’s design.

The shape of the hotel, viewed from above, resembles the Chinese yin and yang symbol, which denotes harmony in contrast.

The positioning of the hotel within the quarry was chosen to provide the most sunlight for guest rooms and for solar panels. The hotel also uses the natural airshaft between its structure and the cliff wall for insulation and cooling.

The design won multiple awards, including “Best Chinese Futura Projects” award at the MIPIM Asia Awards 2011, “Best Hotel Architecture China,” “Best Hotel Architecture Asia Pacific,” and “Best International Hotel Architecture” at the International Hotel Awards 2013. It was nominated as one of the architectural wonders of the world by the National Geographic Channel’s MegaStructures series.

Seymour notes, “The hotel rejuvenates the quarry and brings man and environment together in a highly sustainable relationship. What was once a deep scar left on the landscape is now transformed.”UL

A S I A PAC I F I C 2 0 1 9

5/7/19 11:17 AM

Backpage_Asia19.indd 3

5/7/19 11:17 AM

Backpage_Asia19.indd 4

5/7/19 11:17 AM